It looks like the Treasury market is taking the threat of a September tapering of bond purchases by the Federal Reserve more seriously this morning after two better-than-expected economic data releases.
Right now, the yield on the 10-year U.S. Treasury note is 8 basis points higher at 2.69%, the highest level in weeks.
ADP's monthly employment report, released at 8:15 AM, estimated that 200,000 private payrolls were created in the U.S. economy in the month of June. Economists were only looking for 180,000.
The first reading of Q2 GDP, out at 8:30, revealed that the economy expanded 1.7% at an annualized pace in the second quarter. The number topped the consensus estimate of 1.0% growth.
Treasuries sold off sharply on both releases. Since, the market has stabilized a bit, but is starting to roll over again.
Now, the market is on track for its biggest down day since the sell-off following the last jobs report release on July 5.
Friday, we get the next jobs report, so the fireworks could continue depending on the outcome.
The chart below shows 5-year U.S. Treasury futures.
Thinkorswim