After moving modestly lower over the two previous sessions, treasuries moved back to the upside during trading on Wednesday amid the release of some disappointing economic data.
Bond prices moved steadily higher for much of the session but gave back some ground going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, ended the day down by 3.6 basis points at 1.639 percent.
With the drop on the day, the ten-year yield more than offset the slim gains posted in the two previous sessions, falling to a new four-month closing low.
The strength among treasuries came following the release of a disappointing batch of economic data, including a report from payroll processor ADP showing that private sector employment increased by much less than expected in the month of April.
ADP said private sector employment increased by 119,000 jobs in April following a downwardly revised increase of 131,000 jobs in March. Economists had expected the addition of about 155,000 jobs.
Jennifer Lee, senior economist at BMO Capital, said, "The U.S. ADP national employment report missed expectations in April, and then some, which is, in turn, lowering expectations for the official jobs report due out Friday."
Adding to the worries about the economy, the Institute for Supply Management released a separate report showing a slowdown in the pace of growth in the manufacturing sector in April.
The ISM said its purchasing managers index fell to 50.7 in April from 51.3 in March, although a reading above 50 still indicates growth in the manufacturing sector.
While the reading above 50 points to the fifth consecutive month of growth in the manufacturing sector, the drop pulled the index down to its lowest level since December of 2012.
The Commerce Department also released a report showing an unexpected decrease in construction spending in the month of March.
Nonetheless, treasuries gave back some ground in late-day trading following the Federal Reserve's monetary policy announcement.
As was widely expected, the Fed left interest rates unchanged and maintained the $85 billion per month pace of is asset purchase program.
Bond traders may have been disappointed that the central bank did not offer much of an acknowledgment of the recent soft patch of data.
Rob Carnell, chief international economist at ING, said, "The main nod to the recent run of poor data is a reference to fiscal policy, which it notes '…is restraining economic growth.' But that is about the only substantive change on the economic backdrop."
"Of course, the statement continues to see downside risks to economic growth, but apparently, little more than at the previous meeting," he added.
Notably, the Fed included a sentence indicating that it is prepared to increase or reduce the pace of its asset purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes.
Following today's statement from the Fed, the European Central Bank's monetary policy announcement is likely to take center stage on Thursday. A number of analysts expect the ECB to cut interest rates.
On the U.S. economic front, traders are likely to keep an eye on reports on weekly jobless claims, labor productivity, and the trade balance.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.