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Treasuries Regain Ground Following Yesterday's Weakness

Following the notable move to the downside seen in the previous session, treasuries regained some ground during trading on Thursday.

Bond prices moved to the upside in early trading and remained positive throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.6 basis points to 2.917 percent.

The rebound by treasuries was partly due to bargain hunting after the ten-year yield jumped to its highest closing level in four years on Wednesday.

On the U.S. economic front, a report released by the Labor Department unexpectedly showed a modest decrease in first-time claims for U.S. unemployment benefits in the week ended February 17th.

The report said initial jobless claims dipped to 222,000, a decrease of 7,000 from the previous week's revised level of 229,000.

The drop surprised economists, who had expected jobless claims to come in unchanged compared to the 230,000 originally reported for the previous month.

A separate report from the Conference Board showed a bigger than expected increase by its index of leading economic indicators in the month of January.

The Conference Board said its leading economic index jumped by 1.0 percent in January after climbing by 0.6 percent in December. Economists had been expecting another 0.6 percent increase.

"While the recent stock market volatility will not be reflected in the U.S. LEI until next month, consumers' and business' outlook on the economy had been improving for several months and should not be greatly impacted," said Ataman Ozyildirim, Director of Business Cycles and Growth Research at the Conference Board.

He added, "The leading indicators reflect an economy with widespread strengths coming from financial conditions, manufacturing, residential construction, and labor markets."

Meanwhile, the Treasury Department's auction of $29 billion worth of seven-year notes attracted average demand.

The seven-year note auction drew a high yield of 2.839 percent and a bid-to-cover ratio of 2.49, while the ten previous seven-year note auctions had an average bid-to-cover ratio of 2.54.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

Amid a quiet day on the U.S. economic front, trading on Friday may be impacted by reaction to comments from several Federal Reserve officials.

by RTTNews Staff Writer

For comments and feedback: editorial@rttnews.com

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