Treasuries Close Roughly Flat Ahead Of BoE Decision

(RTTNews) - After seeing early weakness, treasuries regained ground over the course of the trading day on Wednesday before closing roughly flat.

Bond prices climbed well off their early lows, ending the day near the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 1.542 percent.

The nearly flat close by treasuries came as traders looked ahead to the Bank of England's highly anticipated monetary policy announcement on Thursday.

Most analysts expect the BoE to announce an interest rate cut on the heels of Britain's recent vote to leave the European Union.

Last month, the BoE unexpectedly refrained from cutting rates but signaled more action this month after getting more assessments on economic growth.

The early weakness that was shown by treasuries came following the release of a mixed batch of U.S. economic data.

While payroll processor ADP released a report showing stronger than expected private sector job growth, a report from the Institute for Supply Management showed a slowdown in service sector growth.

ADP said private sector employment increased by 179,000 jobs in July after climbing by an upwardly revised 176,000 jobs in June.

Economists had expected employment to grow by about 170,000 jobs compared to the addition of 172,000 jobs originally reported for the previous month.

Meanwhile, the ISM said its non-manufacturing index declined to 55.5 in July after jumping to a seven-month high of 56.5 in June.

A reading above 50 indicates continued growth in the service sector, but economists had expected the index to show a more modest drop to 56.0.

The Treasury Department also announced the details of next week's auctions of three-year and ten-year notes and thirty-year bonds.

The Treasury said it plans to sell $24 billion worth of three-year notes next Tuesday, $23 billion worth of ten-year notes next Wednesday, and $15 billion worth of thirty-year bonds next Thursday.

The BoE's monetary policy decision is likely to be in focus on Thursday, potentially overshadowing U.S. reports on weekly jobless claims and factory orders.