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Treasuries See Further Upside Amid Renewed Economic Worries

Following the notable rebound seen over the course of the previous session, treasuries saw some further upside during trading on Wednesday.

Bond prices moved steadily higher in morning trading before moving roughly sideways in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.8 basis points to 1.596 percent.

Treasuries benefited from the appeal as a safe haven as disappointing jobs data from payroll processor ADP added to economic concerns raised by yesterday's weak manufacturing data.

ADP said private sector employment climbed by 135,000 jobs in September compared to economist estimates for an increase of about 140,000 jobs.

The report also showed a significant downward revision to the increase in private sector jobs in August, which was slashed to 157,000 jobs from the originally reported 195,000 jobs.

"Businesses have turned more cautious in their hiring," said Mark Zandi, chief economist of Moody's Analytics. "If businesses pull back any further, unemployment will begin to rise."

Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, noted the average monthly job growth for the past three months has fallen to 145,000 from 214,000 in the same time period last year.

On Friday, the Labor Department is scheduled to release its more closely watched monthly jobs report, which includes both public and private sector jobs.

Employment is expected to increase by 140,000 jobs in September after rising by 130,000 jobs in August, while the unemployment rate is expected to hold at 3.7 percent.

Reports on weekly jobless claims, service sector activity, and factory orders may attract attention on Thursday, although trading activity is likely to be somewhat subdued ahead of the release of the monthly jobs report on Friday.

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