By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices declined on Thursday, pushing yields higher, after a pair of reports on the U.S. employment scene raised investors’ comfort that the economic recovery remains underway.
Yields on 10-year notes 10_YEAR +1.38% , which move inversely to prices, rose 4 basis points to 3.15%. A basis point is 1/100th of a percentage point.
Yields on 2-year notes 2_YEAR +8.35% rose 3 basis points to 0.46%.
Thirty-year bond yields 30_YEAR +0.48% increased 3 basis points to 4.39%.
Yields spiked to the highs of the day after ADP data private employers added 157,000 jobs in June, much more than analysts expected. See story on ADP data.
“The ADP private-sector employment growth estimate points to a better than expected outcome on tomorrow’s official June payrolls report,” said Millan Mulraine, TD Securities’ economics strategist.
Bonds pared losses after the Labor Department said 418,000 Americans filed first-time claims for unemployment benefits in the latest week, down from 432,000 in the prior week. Read about jobless claims.
Bond traders also paid attention to activity in currency markets and to European Central Bank President Jean-Claude Trichet’s monthly press conference. Treasurys slipped more and the euro EURUSD -0.28% rebounded after Trichet said it would suspend its minimum rating requirement to accept collateral for loans from Portugal, the rating for which was downgraded by Moody’s Investors Service to junk status early this week.
The U.S. bond market has been greatly swayed recently by the tumult in Europe regarding its handing of sovereign-debt problems of Greece, Ireland, Portugal and increasingly, other countries. Any move that softens worries that a country will default on its debt has had the effect of reducing investors’ interest in the relative safety of U.S Treasury debt.
Still to come Thursday is the Treasury Department’s announcement of how much in debt it will auction next week.
Deborah Levine is a MarketWatch reporter, based in New York.
