2024.01.0419:07:00UTC+00Treasuries Move Back To The Downside Ahead Of Jobs Report

After recovering from early weakness and turning higher over the course of the previous session, treasuries moved back to the downside during trading on Thursday.

Bond prices came under pressure at the start of trading and remained firmly negative throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 8.4 basis points to 3.991 percent.

The pullback by treasuries came amid renewed uncertainty about the outlook for interest rates following the release of the minutes of the Federal Reserve's latest monetary policy meeting on Wednesday.

While the minutes reiterated Fed officials widely expect to begin lowering rates in 2024, they also highlighted an "unusually elevated degree of uncertainty" about the outlook.

Adding to concerns the Fed may not begin lowering rates as soon as expected, payroll processor ADP released a report showing private sector employment in the U.S. increased by more than expected in the month of December.

ADP said private sector employment climbed by 164,000 jobs in December after rising by a downwardly revised 101,000 jobs in November.

Economists had expected private sector employment to grow by 115,000 jobs compared to the addition of 103,000 jobs originally reported for the previous month.

A separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits fell by much more than expected in the week ended December 30th.

The Labor Department said initial jobless claims declined to 202,000, a decrease of 18,000 from the previous week's revised level of 220,000.

Economists had expected jobless claims to edge down to 216,000 from the 218,000 originally reported for the previous week.

Trading on Friday is likely to be driven by reaction to the Labor Department's more closely watched report on employment in the month of December.

Economists currently expect employment to increase by 170,000 jobs in December after jumping by 199,000 jobs in November. The unemployment rate is expected to inch up to 3.8 percent from 3.7 percent.