After moving to the downside in the previous session, treasuries moved sharply higher during the trading day on Wednesday.
Bond prices jumped early in the day and remained firmly positive throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled by 11.4 basis points to 0.768 percent.
The strength among treasuries came as traders reacted to the results of the U.S. elections on Tuesday, which have yet to reach a definitive conclusion.
Democratic candidate Joe Biden is currently in the lead in the race for the presidency, with the latest projections giving the former vice president 248 electoral college votes.
Biden is also leading in Nevada and Michigan, which would give him the 270 electoral college votes needed to unseat President Donald Trump.
However, Trump has called for a recount in Wisconsin and has filed to halt counting of ballots in Michigan, suggesting the outcome of the race could be still be up for grabs.
Democrats currently seem unlikely to take control of the Senate, potentially leading a divided government if Biden is in fact the next president.
In U.S. economic news, payroll processor ADP released a report showing private sector employment increased by much less than expected in the month of October.
ADP said private sector employment rose by 365,000 jobs in October after spiking by an upwardly revised 753,000 jobs in September.
Economists had expected private sector employment to surge by 650,000 jobs compared to the jump of 749,000 jobs originally reported for the previous month.
“The labor market continues to add jobs, yet at a slower pace,” said Ahu Yildirmaz, vice president and cohead of the ADP Research Institute. “Although the pace is slower, we’ve seen employment gains across all industries and sizes.”
A separate report released by the Commerce Department showed the U.S. trade deficit narrowed in the month of September.
The Commerce Department said the trade deficit narrowed to $63.9 billion in September from a revised $67.0 billion in August.
Economists had expected the deficit to narrow to $63.8 billion from the $67.1 billion originally reported for the previous month.
The narrower deficit came as the value of exports jumped by 2.6 percent to $176.4 billion, while the value of imports rose by 0.5 percent to $240.2 billion.
Growth in U.S. service sector activity slowed by more than expected in the month of October, according to a report released by the Institute for Supply Management.
The ISM said its services PMI dipped to 56.6 in October from 57.8 in September, although a reading above 50 still indicates growth in the service sector. Economists had expected the index to edge down to 57.5.
The results of the elections are likely to remain in focus on Thursday, overshadowing reports on jobless claims and labor productivity as well as the Federal Reserve’s latest monetary policy decision.
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