After coming under pressure early in the session, treasuries regained some ground over the course of the trading day on Tuesday.

Bond prices climbed well off their worst levels but still closed in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.4 basis points to 1.615 percent after reaching a high of 1.639 percent.

The early weakness among treasuries came as upbeat manufacturing data from overseas added to optimism about the outlook for the global economy, reducing the appeal of safe havens like bonds.

Data showed Chinese manufacturing activity expanded at a faster pace in the month of May, while Eurozone manufacturing activity expanded at a record pace in May despite supple bottlenecks.

The Institute for Supply Management also released a report showing manufacturing activity in the U.S. expanded at a slightly faster pace in May.

The ISM said its manufacturing PMI inched up to 61.2 in May from 60.7 in April, with a reading above 50 indicating growth in the manufacturing sector. The uptick surprised economists, who had expected the index to come in unchanged.

Selling pressure waned over the course of the session, however, with traders wary of making significant moves ahead of the release of the Labor Department’s closely watched monthly jobs report on Friday.

Economists currently expect employment to jump by 664,000 jobs in May after climbing by 266,000 jobs in April. The unemployment rate is also expected to dip to 5.9 percent from 6.1 percent.

Trading on Wednesday may be impacted by reaction to a report on private sector employment as well as the Federal Reserve’s Beige Book.

The Beige Book, a compilation of economic evidence from the twelve Fed districts, may have an impact on the outlook for monetary policy.


LEAVE A REPLY

Please enter your comment!
Please enter your name here