U.S. Government bonds little changed in subdued trade

The U.S. Treasuries saw further selling during a relatively data-light Wednesday session as markets slowly march towards the September employment report on Friday. The yield on the benchmark 10-year Treasury note rose 1-1/2 basis points to 1.697 percent, the yield on 5-year bond jumped 1 basis point to 1.234 percent and the yield on short-term 2-year note climbed nearly 1 basis point to 0.830 percent by 12:00 GMT.

In terms of commentary, markets receive more hawkish commentary from Richmond Fed President Lacker (non-voter) that suggested given how close the Fed was to satisfying its dual mandate that the fed funds rate was extremely low and should be 1.5 percent or higher.

Markets now look ahead to a greater flow of data on Wednesday, highlighted by the ADP employment estimate, trade balance, ISM non-manufacturing and factory orders releases. However, increased focus will quickly shift the September employment report on Friday, which we expect will maintain support for further tightening before year-end (most likely now at the December FOMC meeting).

Meanwhile, the S&P 500 Futures traded 6 points higher at 2,151 by 12:20 GMT.