Treasuries Close Lower But Well Off Worst Levels

(RTTNews) - Following the sell-off seen in the previous session, treasuries saw some further downside on Wednesday but closed well off their worst levels.

After coming under pressure in early trading, bond prices regained some ground late in the day but remained stuck in the red. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 1.7 basis points to 1.797 percent.

The early weakness among treasuries was partly due to continued optimism about Greece's debt negotiations, which helped trigger the pullback on Tuesday.

News that China's central bank lowered the reserve requirement ratio of commercial banks also reduced the safe-haven appeal of bonds.

Meanwhile, traders largely seemed to shrug off a report from payroll process ADP showing weaker than expected private sector job growth in the month of January.

ADP said private sector employment rose by 213,000 jobs in January following an upwardly revised increase of 253,000 jobs in December. Economists had expected an increase of about 223,000 jobs.

Mark Zandi, chief economist of Moody's Analytics, said, "Employment posted another solid gain in January, although the pace of growth is slower than in recent months."

"Businesses in the energy and supplying industries are already scaling back payrolls in reaction to the collapse in oil prices, while industries benefiting from the lower prices have been slower to increase their hiring," he added.

A separate report from the Institute for Supply Management showed a modest uptick by its index of activity in the service sector.

The ISM said its non-manufacturing index inched up to 56.7 in January from an upwardly revised 56.5 in December, with a reading above 50 indicating growth in the service sector.

Another batch of U.S. economic data is scheduled to be released Thursday morning, with traders likely to keep an eye on reports on weekly jobless claims, international trade, and labor productivity.