Treasury yields rise on strong service sector employment number

Treasury yields in the US advanced for the fourth straight session on Wednesday and are trading upbeat in Asia respresenting increased odds of a December Fed rate hike following the release of a strong service sector eumployment number.

The yield on the 10-yr Treasury note rose as high as 1.73% on Wednesday and currently trades around 1.707%.  The two-year note, which mimics short-term rate hike bets, extended four-day winning streak in Asia to trade around 0.838%.

Treasury prices took a hit after the US ISM non-manuacturing report showed a largest increase in the employment index since 1997. Moreover, service sector contributes 90% of the US jobs; hence the odds of strong non-farm payrolls have increased.

As per the CME data, December rate hike bets rose above 60% in response to strong data, which is in line with the uptick seen in the treasury yields.