WASHINGTON (dpa-AFX) - After seeing initial strength, treasuries pulled back near the unchanged line over the course of the trading session on Wednesday.
Bond prices pulled back well off their early highs before ending the day roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.788 percent.
The pullback by treasuries came as stocks on Wall Street turned higher over the course of the trading day after falling sharply at the open.
Treasuries initially benefited from concerns about a potential trade war on news China issued a list of 106 U.S. products that will be subject to additional tariffs.
The Chinese Ministry of Commerce said it plans to impose a 25 percent tariff on $50 billion worth of U.S. exports, including aircraft, cars, and soybeans.
The announcement by China came shortly after the U.S. Trade Representative published a proposed list of products imported from China that could be subject to additional tariffs.
The publication of the list came after President Donald Trump announced last month that he planned to impose about $50 billion in tariffs on Chinese goods over intellectual-property violations.
The USTR said the sectors subject to the proposed tariffs include industries such as aerospace, information and communication technology, robotics, and machinery.
While critics have complained the administration's policies risk starting a trade war, Trump argued in a post on Twitter that the war had already been lost.
'We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S.,' Trump tweeted.
He added, 'Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!'
Meanwhile, traders largely shrugged off a report from payroll processor ADP showing stronger than expected private sector job growth in the month of March.
ADP said employment surged up by 241,000 jobs in March after jumping by an upwardly revised 246,000 jobs in February. Economists had expected an increase of about 205,000 jobs.
A separate report from the Institute for Supply Management showed a modest slowdown in the pace of growth in the service sector in the month of March.
The ISM said its non-manufacturing index dipped to 58.8 in March from 59.5 in February, although a reading above 50 still indicates growth in the service sector. Economists had expected the index to edge down to 59.0.
'Despite the slight dip in the NMI composite index, the non-manufacturing sector enjoyed another month of strong growth in March,' said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee.
With the recent focus on trade relations, trading on Thursday may be impacted by reaction to a report on the U.S. trade deficit in the month of February. The trade deficit is expected to widen slightly to $56.6 billion.
A report on weekly jobless claims may also attract attention ahead of the release of the Labor Department's closely watched monthly jobs report on Friday.
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