Treasurys fall on upbeat manufacturing data

By Annalyn Censky, staff reporter

NEW YORK ( -- Investors eased away from safe-haven Treasurys Wednesday, sending prices lower and yields higher after strong manufacturing data out of both the U.S. and China spurred optimism about the global economy.

In late trading, the benchmark 10-year note yielded 2.58%, up from 2.48% late Tuesday. The shorter term 2-year note yielded 0.51%, the 5-year note yielded 1.41%, and the 30-year bond yielded 3.65%.

A report showed U.S. manufacturing grew in August for the 13th consecutive month, at a faster pace than economists had expected. The report further curbed the safe-haven appeal of government debt, lending more impetus to an already downward trend for bond prices Wednesday.

Earlier in the morning, Treasurys had fallen after readings on Chinese manufacturing indicated expansion in the sector in August.

China is the world's third-largest economy and is the largest holder of U.S. Treasurys. Investors look to reports on its economy to gauge the health of the global recovery.

Investors also weighed two separate reports on U.S. jobs that brought mixed news. The private sector slashed more jobs in August, but looking forward, employers are expecting to make the least cuts in a decade, the reports said.

The move out of Treasurys on Wednesday follows a surge in demand the day before, when fund managers sought to rebalance the bonds in their portfolios at the month-end.

Treasurys are coming off a volatile trading month. Last week, some yields touched record lows as investors opted for the low-risk appeal of government debt amid uncertainty about the economy. To top of page

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