Yields rise slightly ahead of Fed speakers
- The benchmark 10-year yield was last up 1.1 basis points at 0.6819%.
- The market is being pulled in a lot of different directions," said Collin Martin.
- Yields fell slightly after the ADP National Employment Report on Wednesday showed private payrolls rose by 428,000 jobs last month.
CHICAGO: US Treasury yields inched higher on Wednesday as the market awaited more clues from Federal Reserve officials on whether the central bank needs to do more to aid the coronavirus-hit economy.
The benchmark 10-year yield was last up 1.1 basis points at 0.6819%. "The market is being pulled in a lot of different directions," said Collin Martin, fixed income strategist at the Schwab Center for Financial Research in New York.
He pointed to competing forces of "decent" economic data and Federal Reserve officials calling for more monetary stimulus measures, which, in the case of comments by Fed Governor Lael Brainard on Tuesday, prompted yields to fall. More Fed officials were scheduled to speak on Wednesday.
Martin said there may be a minor move in yields if Friday's release of August employment data surprises in either direction, while yields should remain range bound ahead of Monday's Labor Day holiday.
Yields fell slightly after the ADP National Employment Report on Wednesday showed private payrolls rose by 428,000 jobs last month. Data for July was revised upward to show hiring gaining 212,000 jobs instead of the initially reported 167,000. Economists polled by Reuters had forecast private payrolls would increase by 950,000 in August.
Meanwhile, the market was also keeping an eye on developments on the next round of coronavirus aid after negotiations broke off in early August. White House Chief of Staff Mark Meadows said on Tuesday that Republicans in the Senate were likely next week to take up a COVID-19 relief bill offering $500 billion in additional federal aid. But "serious differences" remain between Democrats and the White House, according to US House Speaker Nancy Pelosi.
The two-year US Treasury yield, which typically moves in step with interest rate expectations, was up less than a basis point at 0.1387%.
A closely watched part of the US Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, which is viewed as an indicator of economic expectations, was last at 54 basis points, less than a basis point higher than at Tuesday's close.
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