US Treasury yields fell across the board on Wednesday as risk appetite slid after a sell-off in some foreign equity markets, with further pressure coming from a batch of largely underwhelming US economic data and geopolitical risks. US President Donald Trump's recognition of Jerusalem as Israel's capital touched off a storm of protest from world leaders, helping boost Treasury prices, analysts said.
"Headlines on where the US Embassy should be, which is always a big deal, tend to remind people that the Middle East has never been settled, and that has helped put a bid on Treasury prices," said Jim Vogel, interest rates strategist at FTN Financial in Memphis, Tennessee.
Wall Street shares rose on Wednesday, led by a recovery in technology stocks that had been battered in the previous sessions. But US equity gains failed to lift yields as well, as investors pondered non-market factors. A decline in US unit labour costs in the second and third quarters of this year, suggesting benign inflation pressures, also weighed on Treasury yields, analysts said.
The ADP National Employment Report, which shows private-sector hiring, came out with a slightly higher than expected number of jobs created last month, but analysts have such little faith in the data that it was largely shrugged off. The ADP report showed US private employers created 190,000 jobs in November, down sharply from the month before and roughly in line with economists' expectations of a gain of 185,000.
"ADP hasn't had a very good track record recently of predicting private nonfarm payrolls, overestimating half of the time and underestimating the other half," said Ian Lyngen, head of US rates strategy at BMO Capital Markets in New York. In late trading, US benchmark 10-year yields were down at 2.329 percent, from 2.356 percent late on Tuesday, while the two-year slid to 1.806 percent, from Tuesday's 1.826 percent.
US 30-year yields, meanwhile, dropped to three-month lows and were last at 2.719 percent, down from 2.732 percent on Tuesday.