Treasuries Close Roughly Flat For Second Straight Day

(RTTNews) - Treasuries saw modest weakness for much of the trading session on Wednesday but closed roughly flat for the second straight day.

Bond prices climbed toward the unchanged line going into the close of trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.357 percent.

The roughly flat close by treasuries came following the release of the minutes of the Federal Reserve's latest monetary policy meeting, which revealed the central bank is ready to start shrinking their $4.5 trillion balance sheet this year.

The minutes said there was detailed discussion about ending the Fed's reinvestment policy, with policy makers debating whether to phase out reinvestments or end them all at once.

Earlier in the day, treasuries moved to the downside following the release of a report from payroll processor ADP showing much stronger than expected private sector job growth in the month of March.

ADP said private sector employment soared by 263,000 jobs in March compared to economist estimates for an increase of about 187,000 jobs.

However, the report also said the jump in employment in February was downwardly revised to 245,000 jobs from the previously reported 298,000 jobs.

"Job growth is off to a strong start in 2017," said Mark Zandi, chief economist of Moody's Analytics. "The gains are broad based but most notable in the goods producing side of the economy including construction, manufacturing and mining."

The release of the report from ADP comes two days before the release of the Labor Department's more closely watched monthly jobs report, which includes both public and private sector jobs.

The Labor Department report is expected to show an increase of about 180,000 jobs in March, while the unemployment rate is expected to hold at 4.7 percent.

Meanwhile, traders largely shrugged off a separate report from the Institute for Supply Management showing that service sector growth slowed by more than expected in March.

The ISM said its non-manufacturing index dropped to 55.2 in March from 57.6 in February, although a reading above 50 indicates continued growth in the service sector. Economists had expected the index to edge down to 57.0.

The bigger than expected pullback by the index came after it reached its highest level since October of 2015 in the previous month.

A report on weekly jobless claims may attract some attention on Thursday, although traders are likely to be reluctant to make significant moves ahead of Friday's monthly jobs report.

Bond traders are likely to keep an eye on the Treasury Department's announcement of the details of next week's auctions of three-year and ten-year notes and thirty-year bonds.