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Treasuries Show Significant Move Back To The Downside

After moving notably higher over the course of the two previous sessions, treasuries showed a significant pullback during trading on Wednesday.

Bond prices fell sharply in morning trading and remained firmly negative throughout the afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 14.2 basis points to 3.759 percent.

The pullback by treasuries came as upbeat U.S. economic data added to worries the Federal Reserve will maintain its strategy of aggressively raising interest rates going into the end of the year.

Payroll processor ADP released a report showing private sector employment in the U.S. increased by slightly more than expected in the month of September.

ADP said private sector employment surged by 208,000 jobs in September after climbing by an upwardly revised 185,000 jobs in August.

Economists had expected employment to jump by 200,000 jobs compared to the addition of 132,000 jobs originally reported for the previous month.

The Commerce Department also released a separate report showing the U.S. trade deficit narrowed by more than expected in the month of August.

Meanwhile, the Institute for Supply Management released a report showing a modest slowdown in the pace of growth in U.S. service sector activity in the month of September.

The ISM said its services PMI edged down to 56.7 in September from 56.9 in August, although a reading above 50 still indicates growth in the sector. Economists had expected the index to dip to 56.0.

A report on weekly jobless claims may attract attention on Thursday, although trading activity may be somewhat subdued ahead of the release of the more closely watched monthly jobs report on Friday.

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