Treasuries Finish Lackluster Session Modestly Higher

After an early move to the upside, treasuries turned in a lackluster performance over the course of the trading session on Thursday.

Bond prices pulled back off their early highs and spent much of the rest of the session lingering near the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.8 basis points to 2.913 percent.

The modest decrease came after the ten-year yield spiked by 18.8 basis points over the two previous sessions.

Treasuries initially benefited from the release of a report from payroll processor ADP showing much weaker than expected private sector job growth in the month of May.

ADP said private sector employment climbed by 128,000 jobs in May after jumping by a downwardly revised 202,000 jobs in April.

Economists had expected private sector employment to surge by 300,000 jobs compared to the addition of 247,000 jobs originally reported for the previous month.

Buying interest waned shortly after the start of trading, however, as analysts suggested the weak data is not likely to alter the Federal Reserve’s plans to aggressively raise interest rates.

Fed Vice Chair Lael Brainard told CNBC it’s “very hard to see the case for a pause” in rate hikes, noting the central bank still has “a lot of work to do to get inflation down to our 2% target.”

On Friday, the Labor Department is scheduled to release its more closely watched monthly employment report, which includes both public and private sector jobs.

Economists currently expect employment to jump by 325,000 jobs in May after surging by 428,000 jobs in April, while the unemployment rate is expected to edge down to 3.5 percent from 3.6 percent.

The monthly jobs data is likely to be in the spotlight on Friday, although traders are also likely to keep an eye on a report on service sector activity.

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