U.S. government debt prices were lower Wednesday morning as optimism over the reopening of economies following coronavirus-induced shutdowns boosted risk appetite for investors.
Wall Street rallied on Tuesday and the momentum looks set to continue, as the prospect of businesses reopening outweighs concerns about the spread of the Covid-19 pandemic, rising U.S.-China tensions and nationwide civil unrest following the death in police custody of George Floyd, an unarmed black man.
Protests continued in major cities across the U.S. on Tuesday for the eighth consecutive night as tens of thousands defied curfews, while the Pentagon moved troops to Washington, D.C.
The U.S. Trade Representative’s office revealed Tuesday that it is investigating digital services taxes being either adopted or considered by a number of major economies including the U.K., Italy and Brazil, which could bring about fresh punitive tariffs and heighten global trade tensions.
On the data front, ADP employment change figures for May are due at 8:15 a.m. ET on Wednesday. Final IHS Markit PMI (purchasing managers’ index) readings for May are due at 9:45 a.m. ET before May’s ISM non-manufacturing employment, prices, new orders and PMIs at 10 a.m. April’s factory orders are also due at 10 a.m.
Auctions will be held Wednesday for $40 billion of 105-day Treasury bills and $40 billion of 154-day bills.