Treasuries Move Notably Higher Amid Geopolitical Concerns

(RTTNews) - After ending the previous session roughly flat, treasuries showed a strong move to the upside during trading on Wednesday.

Bond prices moved notably higher in early trading and remained firmly positive throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 7.1 basis points to 2.177 percent.

With the notable decrease on the day, the ten-year yield ended the session at its lowest closing level in almost a month.

Treasuries once again benefited from their appeal as a safe haven after North Korea claimed it successfully performed the republic's first hydrogen bomb test.

North Korean state television said the test of the miniaturized device shows the communist nation has joined the ranks of advanced nuclear states.

The news added to recent geopolitical concerns amid rising tensions between Saudi Arabia and Iran and the ongoing fight against the terrorist group known as ISIS.

Traders largely shrugged off comments from White House Press Secretary Josh Earnest indicating that initial data was "not consistent with North Korean claims of a successful hydrogen bomb test."

On the U.S. economic front, payroll processor ADP released a report showing stronger than expected private sector job growth in December.

ADP said private sector employment jumped by 257,000 jobs in December after climbing by a revised 211,000 jobs in November. Economists had expected employment to increase by about 190,000 jobs.

The bigger than expected increase in private sector employment reflected the strongest job growth since employment surged up by 275,000 jobs in December of 2014.

Meanwhile, the Institute for Supply Management released a separate report showing an unexpected drop by its index of service sector activity, with the decrease reflecting faster deliveries.

The ISM said its non-manufacturing index edged down to 55.3 in December from 55.9 in November, although a reading above 50 continues to point to growth in the service sector.

The modest decrease came as a surprise to economists, who had expected the non-manufacturing index to inch up to 56.2.

Separate reports released by the Commerce Department showed a modest pullback in factory orders and a narrower trade deficit in the month of November.

Late in the session, the Federal Reserve released the minutes of its latest monetary policy meeting, which showed that some members felt the decision to raise interest rates was a "close call."

The minutes also said some members expressed significant concern about still-low readings on actual inflation and the uncertainty and risks present in the inflation outlook.

Trading on Thursday may be impacted by the weekly jobless claims report, although some traders are likely to be looking ahead to the more closely watched monthly jobs report due on Friday.