Bonds

Treasury yields rise after ADP report shows positive May revision

U.S. government debt yields ticked higher Wednesday after a report showed that businesses continued to hire workers in June following the coronavirus shutdown.

The yield on the benchmark 10-year Treasury note was higher at 0.676% and the yield on the 30-year Treasury bond climbed to 1.44%. Yields move inversely to prices.

The move higher in U.S. debt yields followed a report that showed private payrolls in the country grew by 2.369 million in June, shy of the 2.5 million expected from economists polled by Dow Jones, according to ADP and Moody's Analytics. Hiring in June was especially strong in the hard-hit leisure and hospitality industry, which continues to bear a significant economic burden amid the coronavirus outbreak and social distancing measures.

The larger surprise, however, came in a dramatic upward revision to the May private payrolls number to a gain of 3.065 million. ADP's initial May report showed a loss of 2.76 million.

Treasurys

June's ISM manufacturing PMI (purchasing managers' index), employment, prices and new orders data is all due at 10 a.m. ET, and is expected to show a continued recovery last month for U.S. manufacturing activity and hiring.

A survey Tuesday indicated a sharp uptick in U.S. consumer confidence in June, with the Conference Board consumer confidence index rising 12.2 points to 98.1 as businesses reopened. However, a recent surge in cases has cast doubt over the speed of a possible economic recovery.

In congressional testimony on Tuesday, Treasury Secretary Steven Mnuchin said he expects more government stimulus funding to be approved by the end of July, with up to $140 billion in small business loans potentially redirected to support restaurants, hotels and other industries most impacted by the coronavirus pandemic. Federal Reserve Chairman Jerome Powell emphasized that the outlook is "extraordinarily uncertain."

The U.S. reported another record daily spike in new infections on Tuesday with more than 47,000, according to a Reuters tally, with California, Texas and Arizona all reporting record increases. Top White House infections disease expert Dr. Anthony Fauci warned in a congressional testimony on Tuesday that the rate of new infections could eventually surpass 100,000 per day at the current trajectory.

Auctions will be held Wednesday for $25 billion of 105-day Treasury bills and $30 billion of 154-day bills.