Bonds rise on drop in private-sector jobs
Investors flock to Treasurys as soft ADP report raises worries about more job losses.
NEW YORK (CNNMoney.com) -- Bond prices settled higher Wednesday, lowering corresponding yields, after a report revealed a larger-then-expected decline in private employment during June.
The benchmark 10-year note settled up 7/32 to 99 5/32. Its yield slipped to 3.97% from 4% late Tuesday. The 30-year long bond rose 17/32 to 97 20/32. Its yield fell to 4.5% from 4.55% the previous session.
The 2-year note rose 2/32 to yield 2.58%, down from 2.65% late Tuesday.
Labor lows: A report from Automatic Data Processing said that the number of jobs in the private sector fell by 79,000 in the month of June. Economists had only expected a decline of 20,000 jobs and the steep drop raised jitters that the economy might be worse off than originally thought.
"People are starting to revise down their expectation for the employment numbers tomorrow," said Andrew Brenner, senior vice president of MF Global.
The Labor Department will release its payrolls report Thursday at 8:30 a.m. ET.
Economists surveyed by Briefing.com expect that employers cut 60,000 jobs last month after a decline of 49,000 jobs in May. The unemployment rate is forecast to slip to 5.4%.
ECB rates: The price of oil and financial stocks will be the only thing moving the bond market ahead of Thursday's jobs report and the European Central Bank's decision on interest rates, Brenner said.
The ECB is widely expected to hike a key interest rate Thursday. A rate rise in the euro zone could weaken the dollar and add to U.S. inflation problems. 
