WASHINGTON (dpa-AFX) - After ending yesterday's lackluster session roughly flat. Treasuries moved notably higher over the course of the trading day on Wednesday.
Bond prices advanced early in the session and remained firmly positive throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 4.2 basis points to 4.106 percent.
Treasuries benefitted from their appeal as a safe haven after the U.S. government officially shut down early this morning after lawmakers failed to pass a temporary spending bill.
Democrats have demanded that any stop-gap funding bill include an extension of enhanced Obamacare tax credits, while Republicans have argued the issue should be debated after a funding bill is passed.
The strength in the bond market also came amid optimism about the outlook for interest rates following the release of private sector employment data.
While the release of the Labor Department's closely watched monthly jobs on Friday is likely to be delayed due to the shutdown, payroll processor ADP released a report this morning showing an unexpected decrease by private sector employment in the month of September.
ADP said private sector employment fell by 32,000 jobs in September after dipping by a revised 3,000 jobs in August.
Economists had expected private sector employment to climb by 50,000 jobs compared to the addition of 54,000 jobs originally reported for the previous month.
Bill Adams, Chief Economist for Comerica Bank, noted the ADP report could have outsize influence on the Federal Reserve's next interest rate decision if the shutdown lasts long enough to keep the Fed from seeing the September jobs report before their next meeting later this month.
Reports on weekly jobless claims and factory orders were scheduled to be released on Thursday, but the data is likely to be delayed due to the government shutdown.
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