Treasuries See Further Upside Potential As Traders Seek The Safe Haven
After the strong upward move in the previous session, treasuries saw further upside during trading on Wednesday.
Bond prices moved higher early in the session and remained firmly positive throughout the day. As a result, the yield on the benchmark ten-year note, which fell compared to the price of 2.6 basis points to 2,330 percent.
The continued strength in US treasuries came as traders looked for safe havens amid the uncertainty over the economic impact of the Republican tax plan reform.
Concern about the possibility of violence in the Middle East, the attractiveness of government bonds increased, as President, Donald Trump announced that he is officially the recognition of Jerusalem as the capital of Israel.
Trump said in the speech from the White house Diplomatic reception room, the United States would also move the preparations for your Embassy from Tel Aviv to Jerusalem.
“I have found that it is time, officially, Jerusalem recognizes as the capital of Israel,” Trump said. “While previous President did not promise a major campaign to provide this. Today I’m delivering.”
Trump said that he has determined that the motion is in the best interests of the United States and the pursuit of peace between Israel and the Palestinians.
Traders largely shrugged off a report from payroll ADP processor with a slightly larger-than-expected demand in the private sector employment create a positive mood.
ADP said private sector employment rose from 190,000 jobs in November, according to brand the end up by 235,000 jobs in October. Economists had expected an increase of about 185,000 jobs.
A separate report from the labor Department showed a significant increase in labour productivity in the third quarter.
The report said labor productivity rose by 3.0 per cent in the third quarter, unchanged from the preliminary estimate. Economists had expected that the increase in productivity is revised upward to 3.3 percent.
Meanwhile, the labor Department said that unit labor costs fell by a revised 0.2 percent in the third quarter compared to the previously reported 0.5 percent increase. Cost was expected to rise by a revised 0.2 percent.
Trading activity on Thursday subdued, maybe a little, as traders look ahead of the release of the much publicized monthly jobs report on Friday.