Treasuries Recover From Initial Weakness To Close Slightly Higher

(RTTNews) - After an early move to the downside, treasuries regained ground over the course of the trading session on Wednesday.

Bond prices climbed well off their worst levels of the day, closing slightly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by nearly a basis point to 1.434 percent after reaching a high of 1.497 percent.

The initial pullback by treasuries came as traders cashed in on the advance seen in yesterday's session, which saw the ten-year yield hit its lowest intraday level in over two months.

Treasuries rebounded as the Center for Disease Control and Prevention revealed the first confirmed case of Covid-19 caused by the new Omicron variant has been detected in the U.S.

The CDC said the first confirmed omicron case was detected in an individual in California, who returned from South Africa on November 22, 2021.

"The individual, who was fully vaccinated and had mild symptoms that are improving, is self-quarantining and has been since testing positive," the CDC said. "All close contacts have been contacted and have tested negative."

Meanwhile, traders largely shrugged off the latest U.S. economic news, including a report released by payroll processor ADP showed private sector employment increased by slightly more than expected in the month of November.

ADP said private sector employment shot up by 534,000 jobs in November after surging by a revised 570,000 jobs in October.

Economists had expected private sector employment to jump by about 525,000 jobs compared to the addition of 571,000 jobs originally reported for the previous month.

ADP chief economist Nela Richardson noted, "It's too early to tell if the Omicron variant could potentially slow the jobs recovery in coming months."

The Institute for Supply Management released a separate report showing manufacturing activity grew at a slightly faster rate in the month of November.

The ISM said its manufacturing PMI crept up to 61.1 in November from 60.8 in October, with a reading above 50 indicating growth in the sector. Economists had expected the index to inch up to 61.0.

Further news on the Omicron front may attract attention on Thursday along with the Labor Department's report on weekly jobless claims.

Trading activity may be somewhat subdued, however, as traders look ahead to the more closely watched monthly jobs report on Friday.