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TREASURIES-U.S. yields rise after strong private-sector jobs data
July 2, 2014 / 2:30 PM / 3 years ago

TREASURIES-U.S. yields rise after strong private-sector jobs data

* U.S. ADP employment report beats expectations

* U.S. factory orders data weaker than expected

* Yellen expected to maintain dovish stance

* Traders await U.S. nonfarm payrolls

By Sam Forgione

NEW YORK, July 2 (Reuters) - U.S. Treasuries yields rose on Wednesday after more robust than expected U.S. private-sector jobs data ratcheted up expectations for a stronger U.S. nonfarm payrolls report on Thursday.

U.S. companies hired 281,000 workers in June, marking the biggest monthly increase since November 2012, the ADP National Employment Report showed. That was well above economists’ expectations for 200,000 jobs, according to a Reuters poll.

“It was obviously a decent number,” said Sean Murphy, a Treasuries trader at Societe Generale in New York. “I think we’re looking at expectations for tomorrow’s payrolls number to be better than expectations currently.”

Treasuries prices stayed lower after data showed a drop in new orders for U.S. factory goods in May. The Commerce Department said on Wednesday new orders for manufactured goods decreased 0.5 percent. That was a steeper drop than the 0.3 percent decline forecast by analysts.

Traders anticipated Thursday’s jobs report from the U.S. government would be the week’s most important data. Economists expect U.S. employers to have added 212,000 jobs in June, down slightly from 217,000 jobs in May.

Analysts said expectations for continued dovish remarks in a speech by U.S. Federal Reserve chair Janet Yellen at 1500 GMT (11 a.m. EDT) capped losses on Treasuries. Yellen is scheduled to speak at an event hosted by International Monetary Fund Director Christine Lagarde.

“Every time (Yellen) speaks, she has been leaning toward the dovish side,” said Larry McDonald, head of global strategy at futures brokerage Newedge in New York.

McDonald said that given expectations of a continued accommodative policy stance by Yellen, the 10-year Treasury note yield would likely remain well below 2.65 percent for the next few weeks.

Benchmark U.S. 10-year Treasury notes were last down 11/32 in price to yield 2.6 percent, from a yield of 2.57 percent late Tuesday. U.S. 30-year Treasury bonds were last down 26/32 in price to yield 3.44 percent, from a yield of 3.4 percent late Tuesday.

The benchmark S&P 500 stock index last traded flat following Tuesday’s sharp rise. (Reporting by Sam Forgione; Editing by Peter Galloway)

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