LONDON, April 4 U.S. 10-year Treasury debt
yields flirted near three-month lows on Thursday after tepid
private sector jobs data dampened expectations for strong
figures from Friday's more comprehensive labour market report.
A separate report on Wednesday by the Institute for Supply
Management showing growth in the U.S. services sector slowed in
March to the lowest level in seven months also prompted demand
for low-risk U.S. government bonds.
The benchmark 10-year yield was last at 1.816
percent, unchanged from late U.S. trading but still within sight
of Wednesday's low near 1.797 percent, its lowest since early
Analysts said the market was now positioned for a softer
figure for non-farm payrolls on Friday after private payrolls
processor ADP said U.S. private sector employers added 158,000
jobs in March, short of economists' expectations for 200,000.
U.S. jobs data on Friday is expected to show a rise in
non-farm payrolls of 200,000 in March, according to a Reuters
poll that was conducted before release of the ADP survey.
"People are paring down risk ahead of payrolls as revisions
are coming into the market of a worse payroll number," said
Craig Collins, a trader at Bank of Montreal in London.
"After yesterday's number, people are making their new
expectations closer to 150,000-160,000 and I think that if we
get a number above 200,000 that would hit the market back. Other
than that, people are looking for a disappointing number, that's
why rates are low."
Investors would also be focused on the European Central Bank
policy meeting later on Thursday and what measures the bank
might take to ease lingering worries about the euro zone.
Concerns include a draconian Cyprus bailout and political
uncertainty in Italy more than a month after inconclusive
The ECB is expected to keep its main refinancing rate
unchanged at a record low 0.75 percent but market participants
are looking for hints that further monetary policy easing is on
the cards to kick start the region's economy. Eurozone Services
PMI data earlier on Thursday showed a continued contraction in
the sector in March, heaping more pressure on the central bank.