Treasuries showed a strong move to the upside during trading on Thursday, further offsetting the steep drop seen following the release of the Federal Reserve minutes on Tuesday.
After seeing initial strength, bond prices gave back some ground in early trading but moved back to the upside as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 6.8 basis points to 2.175 percent.
The strength among treasuries came as some traders looked to the safety of U.S. bonds ahead of the release of the Labor Department's monthly employment report on Friday.
Since the U.S. stock markets will be closed for Good Friday, stock traders will have to wait until next Monday to react to the actual jobs numbers.
While the report is expected to show the addition of at least 200,000 jobs for the fourth month in a row in March, the unemployment rate is expected to remain elevated at 8.3 percent.
As a result of the focus on the monthly report, traders largely shrugged off the release of a separate Labor Department report showing a modest drop in jobless claims in the week ended March 31st.
The report showed that jobless claims fell to 357,000 from the previous week's revised figure of 363,000. Economists had expected jobless claims to edge up to 360,000 from the 359,000 originally reported for the previous week.
With the unexpected decrease, jobless claims fell to their lowest level since coming in at 352,000 in the week ended April 19, 2008.
All eyes are likely to be on the monthly jobs report on Friday, although trading activity may be subdued following the initial reaction due to the early close of the bond markets.
by RTT Staff Writer
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