By Mark DeCambre and William Watts, MarketWatch
30-year note yield on track to finish at lowest level in 5 weeks
Treasurys rose Thursday, pushing down yields sharply, after data pointed to lackluster private-sector jobs growth a day ahead of the government's official December employment report.
The tumble in yields was most pronounced in long-dated Treasurys, with the yield on the 10-year Treasury note at 2.355%, off 9.5 basis points, and on pace for its biggest single-day slump since June 27, according to Dow Jones data. The yield for the 30-year Treasury , known as the long bond, was off 8.3 basis points, at 2.962%, putting it on track for its steepest yield decline since July 5.
Bond prices move inversely to yields.
A slightly weaker employment report helped to kick off the rally in bonds, which pressured yields, and a slump in crude-oil future (http://www.marketwatch.com/story/oil-prices-climb-amid-optimism-over-the-start-of-production-limits-2017-01-05)s , on a pick up in crude products, helped to erode risk appetite, fostering demand for the perceived safety of government bonds.
On Thursday, ADP Inc. said private-sector employers added 153,000 jobs in December (http://www.marketwatch.com/story/private-sector-adds-153000-jobs-in-december-adp-2017-01-05), down from a lowered November figure of 215,000 and below economist expectations. The figures come a day ahead of the Labor Department's December jobs report. Economists surveyed by MarketWatch are forecasting it to show nonfarm payrolls rose by 185,000 in December, up from 178,000 in November, with a tick up in the unemployment rate to 4.7% from 4.6% in the prior period.
Moves in the 2-year yield were less dramatic, off 4.8 basis points, at 1.162% in recent trade.
"Taken literally, the [employment] data suggest downside risk to the [Bureau of Labor Statistics] report on Friday...However, as we discussed in our latest Daily Notes, the deviation between the ADP data and the BLS data has been larger, on average, in December than in any other month," wrote Jim O'Sullivan, chief U.S. economist at High Frequency Economics.
Meanwhile, the number of Americans who applied for unemployment benefits after the December holidays fell by 28,000, hugging close to a 43-year low (http://www.marketwatch.com/story/jobless-claims-drop-28000-to-233000-near-43-year-low-2017-01-05).
The lackluster labor market report also comes as the dollar has retreated sharply from a 14-year high, with the ICE U.S. Dollar Index , which tracks the buck against a basket of six rival currencies, on track for its steepest daily decline, off 1.2% at 101.46, since June, according to FactSet data.
In separate economic reports, a read on the U.S. services sector held steady at a 12-month high in December, suggesting growth in nonmanufacturing activity, mainly the service sector, remains strong.
On Wednesday, Treasury yields turned lower (http://www.marketwatch.com/story/treasury-yields-tick-higher-as-inflation-outlook-brightens-2017-01-04) to end the day little-changed after minutes of the Federal Reserve's December meeting sounded less hawkish than investors had anticipated.
(END) Dow Jones Newswires
January 05, 2017 12:54 ET (17:54 GMT)
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