U.S. Treasuries jump ahead of September ADP non-farm employment data, FOMC speeches

The U.S. Treasuries jumped during Wednesday’s afternoon session ahead of the country’s ADP non-farm employment data for the month of September, scheduled to be released today by 12:15GMT and the Federal Open Market Committee (FOMC) members Harker and Williams’ speech, also due today by 13:00GMT and 14:50GMT respectively.

The yield on the benchmark 10-year Treasury yield suffered 1-1/2 basis points to 1.628 percent, the super-long 30-year bond yield slipped 1 basis point to 2.095 percent and the yield on the short-term 2-year plunged 3-1/2 basis points to 1.520 percent by 11:50GMT.

After yesterday’s very weak manufacturing ISM survey flagged increasing industrial sector weakness, US stocks inevitably went firmly into reverse, with the S&P500 closing down 1.2 percent, Daiwa Capital Markets reported.

And, of course, USTs rallied. At one point 10-year yields were down 14bps from their intra-day peak of 1.75 percent, but have edged gradually back up to 1.66 percent. 2-year yields, however, also dropped about 14bps from their peak and have failed to regain the lost ground, currently languishing down at 1.55 percent, the report added.

And the market-implied probability of a rate cut at the end-October FOMC meeting, based on fed funds futures, has moved back above 50 percent, Daiwa further noted in the report.

Meanwhile, the S&P 500 Futures remained tad -0.44 percent down at 2,924.62 by 11:55GMT.