By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) -- Treasury prices came under pressure on Wednesday after ADP said the U.S. private-sector added far fewer jobs than economists expected.
Yields on 10-year notes (UST10Y 2.96, +0.01, +0.17%) , which move inversely to prices, rose 1 basis point to 2.97%. It closed Tuesday at the lowest level since April 2009.
Yields on 2-year notes (UST2YR 0.61, +0.01, +1.10%) increased 1 basis point to 0.61%, after touching the lowest level on record on Tuesday. A basis point is 0.01%.
U.S. private-sector firms created 13,000 more jobs in June, according to the ADP employment report. Read more on ADP.
The data comes two days before the government more closely-watched nonfarm payrolls report. Economists surveyed by MarketWatch expect the Labor Department to say on Friday the economy lost 130,000 in June, including the loss of some 250,000 temporary workers at the Census Bureau.
Also somewhat supporting bonds were comments from Charles Evans, the president of the Chicago Federal Reserve Bank, according to CRT Capital Group.
Evans said inflation has recently moved down in a sharp, unusual, fashion and should be under 2% for the next three years. He is not optimistic about employment growth, he said on CNBC.
European banks
Treasurys had been under some pressure before the U.S. data after European banks sought a smaller amount of European Central Bank loans than markets had anticipated, aiding U.S. stock futures and the euro versus the dollar. Read more on ECB loans.
Treasury yields staying near such significant lows also has many analysts questioning whether the market is signaling a very slow, drawn out recovery -- even if the economy doesn't quite a double-dip back into recession.
"Global financial market returns stand at the threshold of mediocrity," said Bill Gross, chief investment officer at Pimco, which manages $1.07 trillion in assets.
"With bonds priced not for recession but near depression, most major global bond indices now yield less than 3%, surely a forerunner of returns to come," he wrote in a commentary posted on the firm's Web site. "Stocks, long the volatile vamp of investor optimism, have not yet adjusted to the New Normal of half-size economic growth induced by deleveraging, reregulation, and deglobalization and have low single digit prospects as well." Read Bill Gross's commentary.
