MW: Treasurys reverse some of prior session’s rally
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices declined on Wednesday, pushing yields up and reversing some of the strong rally seen in the prior session stemming from worries about the potential take-up for Greece’s looming debt-swap deal.
Yields on 10-year notes 10_YEAR +1.65% , which move inversely to prices, rose 3 basis points to 1.98%, after falling Tuesday by the most in three weeks. A basis point is one-hundredth of a percentage point.
Yields on 30-year notes 30_YEAR +1.04% inched up 3 basis points to 3.10%. On Tuesday, they also fell by the most since mid-February.
Yields on 5-year notes 5_YEAR +3.28% added 2 basis points to 0.85%, reversing part of the prior session’s drop.
Treasury prices remained under mild pressure after the ADP employment report said private employers in the U.S. added 216,000 jobs in February, close to what economists were expecting. Read about ADP.
“The good news here is that there were no ugly surprises given the recent concern that has gathered on growth prospects here and abroad,” said Eric Green, chief market economist at TD Securities.
Separate reports showed U.S. productivity and unit labor costs in the fourth quarter was revised higher. See more on productivity.
Economists polled by MarketWatch expected the Labor Department’s jobs estimate, which includes both private- and public-sector payrolls, to show 213,000 jobs added in February, compared with 243,000 in January.
On Tuesday, Treasurys jumped on renewed worries that Greece won’t garner enough participation for its bond swap before the Thursday evening (Athens time) deadline. U.S. stocks had their worst one-day decline this year, the euro hit a three-week low and commodities sold off. Read about Tuesday’s bond rally.
Tensions diffused a little by Wednesday, aided by news that more banks agreed to participate in Greece’s debt swap. Read about Greek debt swap.
“The market’s attention is entirely focused on the reception to the Greek bond exchange to the exclusion of other influences,” said David Ader and Ian Lyngen, bond strategists at CRT Capital Group. “This is going to overwhelm whatever the U.S. data shows” at least until the nonfarm payrolls report on Friday.
