Plus   Neg

Treasuries Close Roughly Flat Following Choppy Trading Data

After seeing modest strength in the previous session, treasuries showed a lack of direction over the course of the trading day on Thursday.

Bond prices spent the day bouncing back and forth across the unchanged line before closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, ended the day unchanged at 2.963 percent.

The choppy trading in the bond market came following the release of a report from the Labor Department showing consumer prices rose by less than expected in the month of August.

The Labor Department said its consumer price index rose by 0.2 percent in August, matching the increase seen in July. Economists had expected prices to climb by 0.3 percent.

Excluding food and energy prices, core consumer prices inched up by 0.1 percent in August after rising by 0.2 percent for three straight months. Core prices had been expected to show another 0.2 percent increase.

The report also said the annual rate of consumer price growth slowed to 2.7 percent in August from 2.9 percent in July.

Core consumer prices were up by 2.2 percent year-over-year in August compared to the 2.4 percent increase in the previous month.

"There is no reason to suspect that the weaker increase in consumer prices in August is the start of another dip like we saw in early 2017," said Paul Ashworth, Chief U.S. Economist at Capital Economics.

He added, "With labor market conditions tight, wage growth accelerating and input prices being pushed up by capacity constraints and recently imposed tariffs, there is plenty of upward pressure on prices."

A separate report from the Labor Department unexpectedly showed a slight drop in initial jobless claims in the week ended September 8th.

The report said initial jobless claims dipped to 204,000, a decrease of 1,000 from the previous week's revised level of 205,000.

Economists had expected jobless claims to rise to 210,000 from the 203,000 originally reported for the previous week.

With the unexpected decrease, jobless claims fell to their lowest level since hitting 202,000 in December of 1969.

Trading on Friday may be impacted by reaction to key economic data, including reports on retail sales, import and export prices, industrial production and consumer sentiment.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Follow RTT