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Treasuries Benefit From Concerns About Trade, Global Economy

After ending the previous session roughly flat, treasuries showed a notable move to the upside over the course of the trading session on Thursday.

Bond prices moved higher early in the session and climbed even more firmly into positive territory in afternoon trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5 basis points to 2.652 percent.

Treasuries benefited from renewed concerns about a U.S.-China trade deal after a report from CNBC said President Donald Trump and Chinese President Xi Jinping are "highly unlikely" to meet before a March 2nd deadline,

A senior administration official told CNBC that Trump and Xi may still meet "shortly" after the deadline, when tariffs on Chinese goods are currently set to jump automatically.

The report from CNBC came after White House economic adviser Larry Kudlow told Fox Business the U.S. and China have a "pretty sizable distance to go" before reaching a trade deal.

Worries about the U.S.-China trade talks added to early concerns about the global economy after the European Commission lowered its eurozone growth forecast.

The European Commission slashed its GDP growth forecast for 2019 to 1.3 percent from 1.9 percent and lowered its estimate for growth in 2020 to 1.6 percent from 1.7 percent.

The downgrade reflected external factors, such as trade tensions and the slowdown in emerging markets, notably in China.

Officials warned that the European outlook faces substantial risks due to the uncertainty about Brexit and the slowdown in China.

Meanwhile, the Treasury Department revealed its auction of $19 billion worth of thirty-year bonds attracted average demand.

The thirty-year bond auction drew a high yield of 3.022 percent and a bid-to-cover ratio of 2.27, while the ten previous seven-year note auctions had an average bid-to-cover ratio of 2.31.

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

Today's thirty-year bond auction came after the Treasury sold $38 billion worth of three-year notes on Tuesday and $27 billion worth of ten-year notes on Wednesday.

Trading on Friday may be somewhat subdued, as traders look ahead to U.S.-China trade talks in Beijing next week amid a quiet day on the U.S. economic front.

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