US Treasuries yields rose on Wednesday with benchmark yields hitting 1-1/2 week highs as encouraging economic data from Europe and the United States spurred selling of bonds for a second day. China's decision to cut bank reserve requirements, the first such move in more than two years, as it attempts to stem slowing economic growth also reduced safe-haven appetite for Treasuries, analysts said.
Wednesday's selloff continued a market reversal from a stellar January, when Treasuries posted their best month in over six years. "We got follow-through selling from Tuesday," said Larry Milstein, head of US government and agency trading at R.W. Pressprich & Co in New York.
On Tuesday, the 10-year and 30-year yields booked their largest one-day jumps since November 2013 and July 2013, respectively, according to Reuters data. The market recovered some of its losses as oil prices snapped their four-day winning streak on data that showed a record high US crude inventory. Analysts also cited a Bloomberg story that said Greece might face a cash crunch as early as March. The country's new government appealed to the European Central Bank on Wednesday to keep its banks afloat and moved to renegotiate debt terms with its euro zone partners.
In the face of turbulence in the oil market and the fragility of Greece's debt situation, the US and European economies showed resilience. A business survey showed the euro-zone private sector grew at its fastest pace in six months in January. Across the Atlantic, ADP said US private employers added 213,000 jobs in January, which mildly missed forecast but was high enough to support the view of steady jobs creation.
In late US afternoon trading, benchmark 10-year note yields reached as high as 1.846 percent, the highest in 1-1/2 weeks before slipping to 1.802 percent, up 2.2 basis points from late on Tuesday. The two-year Treasuries yield hit a three-week high of 0.540 percent. It last traded at 0.512 percent, up 0.8 basis point from Tuesday.
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