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Treasuries Climb Off Worst Level But Still Close Lower

Treasuries moved to the downside during trading on Wednesday, more than offsetting the modest strength seen in the previous session.

Bond prices climbed off their worst levels in afternoon trading but remained in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.2 basis points to 0.677 percent.

The weakness among treasuries came following the release of some upbeat U.S. economic data, including a report from payroll processor ADP showing private sector employment surged up by more than expected in the month of September.

ADP said private sector employment spiked by 749,000 jobs in September after jumping by an upwardly revised 481,000 jobs in August.

Economists had expected employment to increase by 650,000 jobs compared to the addition of 428,000 jobs originally reported for the previous month.

The National Association of Realtors also released a report showing pending home sales jumped to a record high in the month of August.

NAR said its pending home sales index spiked by 8.8 percent to 132.8 in August after surging up by 5.9 percent to 122.1 in July. Economists had expected pending home sales to increase by 3.2 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Traders were also reacting to comments from Treasury Secretary Steven Mnuchin, who said he is "hopeful" about reaching an agreement with House Speaker Nancy Pelosi on a new coronavirus stimulus bill.

"I say we're going to give it one more serious try to get this done and I think we're hopeful that we can get something done," Mnuchin said during the Delivering Alpha conference presented by CNBC and Institutional Investor. "I think there is a reasonable compromise here."

However, treasuries regained some ground after Senate Majority Leader Mitch McConnell said Republicans and Democrats remain "far apart" on a deal.

Trading on Thursday may be impacted by reaction to another batch of economic data, including reports on weekly jobless claims, personal income and spending, manufacturing activity and construction spending.

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