By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices turned back down on Wednesday, pushing yields up for the first day in four, erasing a gain after data based on ADP payrolls showed private employers added 114,000 jobs in July.
“Treasurys were under modest pressure overnight as the market consolidated after a solid rally over the last several trading sessions,” said strategists at CRT Capital Group.
Yields on 10-year notes 10_YEAR -2.26% , which move inversely to prices, rose 1 basis point to 2.62%, up from near the lowest levels seen since November. A basis point is 1/100th of a percentage point.
Yields on 2-year notes 2_YEAR +2.18% added 1 basis point to 0.33%, after having again touched a record low during Asian trading hours.
Thirty-year bond yields 30_YEAR -2.69% slipped 1 basis point to 3.90%, also the lowest in nine months.
While the ADP data were a little more positive than economists had forecast, this comes on the heels of a string of more reliable indicators all pointing to a slowdown in the U.S. recovery, analysts said. Read more about ADP.
That, along with Washington’s debt-ceiling deal that cuts federal spending and could further reduce economic growth, has sent long-term bond yields down for four straight days. Ten-year yields have fallen from just above 3% a little over a week ago. See more about Treasury bond rally.
Strategists at RBS Securities have also been watching U.S. stocks, which they said broke below key technical levels on Tuesday.
“Yesterday’s technical breakdown, and the recent evidence that global manufacturing growth has slowed, are harbingers of worse things to come for [stocks] — a critical prop for U.S. household wealth and, thus, consumer spending,” they wrote in a note. “Stocks are topping and becoming a bigger threat to growth at a time when fiscal prosperity is about to morph into austerity.
“These are, of course, fertile conditions for high-grade debt holders.”
ADP’s report also comes two days before the government’s highly anticipated data on nonfarm payrolls and joblessness for July.
Still to come Wednesday is ISM’s July report on the services sector of the U.S. economy.
