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US Treasurys whipsaw after Treasury offers no hints on long issue

U.S. government debt prices whipsawed on Wednesday after the Treasury Department gave no clues about whether it will issue longer-dated bonds.

The yield on the benchmark 10-year Treasury notes sat slightly higher at 2.255 while the yield on the 30-year Treasury bond was lower at 2.843 percent as of 12:00 p.m. ET. Bond yields move inversely to prices.

The Treasury said it will borrow $96 billion in the third quarter and has begun to consider how it will increase debt issuance later in the year to make up for a future decline in Federal Reserve bond purchases. It gave no further immediate information on its consideration of introducing ultra-long bonds.

Treasury yields briefly fell after the Treasury Department's announcement.

"There was a refunding decision at 8:30. [The Treasury Department] didn't' say they were issuing an ultra-long bond … On the margin I think people were anticipating we might get something more in terms of a treasury long bond. But they just put that off," said Ian Lyngen of BMO.

Symbol
Yield
 
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US 3-MO
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US 1-YR
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US 2-YR
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US 5-YR
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US 10-YR
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US 30-YR
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On the data front, companies added 178,000 jobs in July on a surge in service-related occupations and despite a decrease in manufacturing jobs, according to a report Wednesday from ADP and Moody's Analytics. The number was just shy of Wall Street expectations of 185,000.

The report is often seen as a preview to the U.S. government's monthly nonfarm payrolls report, which is set for release Friday.

In the commodities markets, oil prices rebounded after government data showed a smaller-than-expected dip in U.S. crude inventories.

U.S. commercial crude inventories fell by 1.5 million barrels to a total of 481.9 million barrels in the week through July 28. Investors had expected inventories to fall by 3 million barrels.

Brent was trading at $52.29 and WTI at $49.50 as of 12:08 p.m. ET.

Reuters contributed to this report.