Treasuries saw notable strength during trading on Thursday, extending the strong upward move seen in the previous session on the heels of the release of a disappointing batch of U.S. economic data.
After moving sharply higher in early trading, bond prices gave back some ground as the day progressed but still closed firmly positive. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price fell by 4.4 basis points to 1.581 percent.
With the drop, the ten-year yield added to the 10.6 basis point loss it posted on Wednesday, once again setting a new record closing low. During the session, the yield hit an intraday low of 1.533 percent.
Treasuries benefited from the release of a slew of U.S. economic data, including reports providing further signs of sluggishness in the labor market.
Considerable buying interest was generated by a report from payroll processor ADP showing weaker than expected private sector job growth.
ADP said private sector employment rose by 133,000 jobs in May following a downwardly revised increase of 113,000 jobs in April. Economists had expected an increase of about 154,000 jobs.
A separate report from the Labor Department showed that initial jobless claims rose to 383,000 in the week ended May 26th from the previous week's revised figure of 373,000. Jobless claims had been expected to come in unchanged at the 370,000 originally reported for the previous week.
A Commerce Department report showing slower than previously estimated first quarter GDP growth also helped to drive treasuries higher along with a report showing that Chicago-area business activity expanded at a much slower rate in the month of May.
U.S. economic data is likely to remain in focus on Friday, with all eyes likely to be on the Labor Department's monthly employment report.
Economists expect the report to show an increase of about 150,000 jobs in May compared to an increase of 115,000 jobs in April. At the same time, the unemployment rate is expected to remain unchanged at 8.1 percent.
The monthly jobs report is likely to overshadow separate reports on personal income and spending, national manufacturing activity, and construction spending.
by RTT Staff Writer
For comments and feedback: email@example.com