Following the pullback seen in the previous session, treasuries moved back to the upside during the trading day on Wednesday.

Bond prices pulled back off their best levels in afternoon trading but remained firmly positive. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 6.3 basis points to 0.635 percent.

The rebound by treasuries came as traders looked for safe havens came amid renewed coronavirus concerns after White House officials warned of nearly a quarter million deaths from the pandemic.

During a White House press conference on Tuesday, President Donald Trump warned the U.S. is facing a “very, very painful two weeks.”

White House officials are now projecting between 100,000 and 240,000 deaths in the U.S. as a result of the outbreak, which Trump previously sought to downplay.

“This could be a hell of a bad two weeks. This is going to be a very bad two, and maybe three weeks. This is going to be three weeks like we’ve never seen before,” Trump said.

The comments from the White House come as data from Johns Hopkins University shows there are more than 190,000 confirmed coronavirus cases in the U.S. and more than 4,100 deaths.

On the U.S. economic front, payroll processor ADP released a report showing a modest decrease in private sector employment in the U.S. in March, although the data does not reflect the full impact of the coronavirus-induced shutdown.

ADP said private sector employment fell by 27,000 jobs in March after jumping by a downwardly revised 179,000 jobs in February.

Economists had expected private sector employment to plunge by 150,000 jobs compared to the addition of 183,000 jobs originally reported for the previous month.

The drop was much smaller than expected but still reflects the first decrease in private sector employment since September of 2017.

ADP also noted its national employment report, or NER, only utilizes data through the 12th of the month, which is the same period the Labor Department uses for its more closely watched monthly jobs report.

“As such, the March NER does not fully reflect the most recent impact of COVID-19 on the employment situation, including unemployment claims reported on March 26, 2020,” said Ahu Yildirmaz, co-head of the ADP Research Institute.

A separate report from the Institute for Supply Management showed a relatively modest contraction in U.S. manufacturing activity in the month of March.

The ISM said its purchasing managers index dipped to 49.1 in March after edging down to 50.1 in February. While a reading below 50 indicates a contraction in manufacturing activity, economists had expected the index to show a steeper drop to 45.0.

The Labor Department will provide a more updated look at the employment situation with the release of its report on weekly jobless claims on Thursday.

The jobless claims report is likely to overshadow separate reports on the U.S. trade deficit and factory orders in the month of February.

The Treasury Department is also scheduled to announce the details of this month’s auctions of three-year and ten-year notes and thirty-year bonds.


LEAVE A REPLY

Please enter your comment!
Please enter your name here