Robust US jobs data lift Treasury yields Wednesday 19:15 GMT. Further signs of strength in the US and eurozone economies helped fuel a sell-off in highly-rated government bonds and gold, although equities on both sides of the Atlantic saw only muted follow-through buying after the previous session's solid gains. There was little reaction in the markets to the release of the minutes of the Federal Reserve's December policy meeting, which indicated that the central bank planned to "proceed cautiously" in slowing down its monthly asset purchases. Dan Greenhaus, chief global strategist at BTIG, said the minutes had merely reinforced what was already known. The Fed is going to go somewhat slowly in its initial steps to slow purchases. But after a 4 per cent GDP print in the third quarter, and the possibility of a 3 per cent-plus print in the fourth quarter, investors will have to be on guard for an acceleration in economic activity and with it, a greater reduction in asset purchase volumes. Treasury bond prices had already come under pressure after ADP, the US private payroll processor, said that the pace of job creation in December had come in at the highest in a year. Figures from the eurozone showed retail sales rising sharply in November, while German factory orders and exports in the same month were also encouraging. But equity bulls in the US and Europe appeared unimpressed. By midday in New York, the S&P 500 was flat at 1,837, while the FTSE Eurofirst 300 edged up 0.1 per cent. There was a more upbeat tone in Japan, where the Nikkei 225 climbed 1.9 per cent in response to overnight strength on Wall Street after a narrowing of the US trade deficit in November fuelled expectations of stronger growth in the fourth quarter. Furthermore, Christine Lagarde, the International Monetary Fund's managing director, said she expected the organisation would upgrade its global growth forecasts in the next few weeks. The optimistic view of the US got a further boost as ADP said private employers had added 238,000 jobs last month, heightening expectations that the official December non-farm payrolls report - due out on Friday - would be strong. Analysts said strong jobs data would be likely to heighten the Federal Reserve's resolve to continue winding down its monthly asset purchases, or quantitative easing. "Rising employment growth would increase the chances of a self-sustaining US upturn as consumer spending rises and confidence picks up, paving the way for a finish to QE at the end of 2014," said Nick Stamenkovic, macro strategist at RIA Capital Markets. This backdrop does not bode well for Treasuries. Indeed, the yield on the 10-year US government bond - which moves inversely to its price - was up 6 basis points at 3 per cent. However, the 10-year has found it difficult to establish a foothold above that level since the Fed unveiled its intention to "taper" last month - in spite of the broadly encouraging nature of recent US economic releases. Analysts say this has largely been down to the Fed's insistence that interest rates would remain low for some time to come. "The Federal Open Market Committee's strengthened forward guidance suggests that expectations for short-term term interest rates in coming years are likely to remain low," said John Higgins at Capital Economics. Indeed, if the Committee is successful in anchoring short-term rates, there is little reason to expect long-term yields to rise sharply. We forecast the 10-year yield to drift up to 3.25 per cent by the end of this year. The German Bund yield, meanwhile, edged up 2bp to 1.91 per cent as the day's data releases added to the sense of optimism over the country's prospects. "After a disappointing start to the fourth quarter, it increasingly looks as if the German economy has regained momentum towards the very end of the year, with hard data gradually starting to meet the high expectations created by buoyant confidence indicators," said Carsten Brzeski, an economist at ING. Meanwhile, the dollar maintained its upward trend following the release of the ADP numbers, while gold was down another $11 at $1,220 an ounce. The dollar index, a gauge of the currency "s value against a weighted basket of counterparts, was up 0.4 per cent, as the euro fell 0.4 per cent to a one-month low of $1.3555. Most analysts expect the European Central Bank to keep its powder dry at its policy meeting on Thursday, in spite of fresh concerns about the potential risk of eurozone deflation. "The ECB will be aware of the role of technical factors in pushing inflation lower in December," said Chris Scicluna at Daiwa Capital Markets. So, it will assess that the risk of deflation taking hold across the euro area as a whole remains relatively low and has not increased materially over the past month, and thus it sees no need for a further rate cut this week. Industrial commodities were lower, with Brent crude down 23 cents at $107.09 a barrel and copper down 0.1 per cent in London at $7,344 a tonne.