Following the sharp pullback seen in the previous session, treasuries saw some further downside during trading on Wednesday.
Bond prices moved lower early in the day and remained firmly negative throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.6 basis points to 1.649 percent.
The continued weakness among treasuries came on the heels of reports of breakthroughs in the developments of treatments for the coronavirus.
A report from Reuters noted traders are pointing to a Chinese TV report indicating a research team at Zhejiang University has found an effective drug to treat people with the new virus.
Sky News also reported that a leading British scientist has made a significant breakthrough in the race for a coronavirus vaccine by reducing a part of the normal development time from “two to three years to just 14 days.”
Traders seemed to ignore the response to the reports by the World Health Organization, which stated there are “no known” treatments against the virus.
“There are no known effective therapeutics against this 2019-nCoV and WHO recommends enrollment into a randomized controlled trial to test efficacy and safety,” the WHO said in a statement.
The agency added, “A master global clinical trial protocol for research and prioritization of therapeutics is ongoing at the WHO.”
Further reducing the appeal of safe havens like treasuries, payroll processor ADP released a report showing much stronger than expected private sector job growth in the month of January.
ADP said private sector employment soared by 291,000 jobs in January after jumping by a revised 199,000 jobs in December.
Economists had expected employment to increase by about 156,000 jobs compared to the addition of 202,000 jobs originally reported for the previous month.
“Mild winter weather provided a significant boost to the January employment gain,” said Mark Zandi, chief economist of Moody’s Analytics.
He added, “The leisure and hospitality and construction industries in particular experienced an outsized increase in jobs.”
The Institute for Supply Management also released a report showing a faster rate of growth in U.S. service sector activity in the month of January.
The ISM said its non-manufacturing index rose to 55.5 in January from a revised 54.9 in December, with a reading above 50 indicating service sector growth.
Economists had expected the non-manufacturing index to inch up to 55.1 from the 55.0 originally reported for the previous month.
Meanwhile, a separate report released by the Commerce Department showed the U.S. trade deficit widened in December amid a jump in the value of imports.
Reports on weekly jobless claims and labor productivity may attract attention on Thursday, although trading activity may be somewhat subdued ahead of the release of more closely watched monthly jobs report on Friday.