Treasuries Extend Yesterday's Rebound As Job Openings Dip More Than Expected

(RTTNews) - Extending the rebound seen in the previous session, treasuries showed another notable move to the upside during trading on Wednesday.

After surging early in the day, treasuries remained firmly positive throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell 7.6 basis points to 3.768 percent.

The early advance by treasuries came after the Labor Department released a report showing a bigger than expected decrease by job openings in the U.S. in the month of July.

The Labor Department said job openings edged to 7.67 million in July from a downwardly revised 7.91 million in June.

Economists had expected jobless claims to dip to 8.10 million from the 8.18 million originally reported for the previous month.

"The report offers further evidence of cooler labor market conditions but doesn't change our call for the Federal Reserve to begin the process of normalizing interest rates with a 25bp cut at the FOMC meeting on September 18," said Nancy Vanden Houten, U.S. Lead Economist at Oxford Economics.

She added, "The pace of hiring ticked up slightly, but layoffs and other separations increased, suggesting some downside risk to our forecast for August job growth of 170,000."

The Commerce Department released a report showing the U.S. trade deficit increased to its largest in over two years in the month of July.

Early in the session, the ten-year yield briefly traded above the two-year yield, reversing the inverted yield curve that often signals a recession.

Reports on jobless claims, private sector employment and service sector activity are likely to attract attention on Thursday, although trading may be somewhat subdued ahead of the release of the more closely watched monthly jobs report on Friday.