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Treasuries Close Slightly Higher After Rebounding From Early Weakness

After coming under pressure early in the session, treasuries rebounded over the course of the trading day on Thursday.

Bond prices climbed well off their worst levels of the day before finishing the session slightly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by nearly a basis point to 2.227 percent.

The ten-year yield pulled back after reaching an intraday high of 2.276 percent, once again ending the day at its lowest closing level since September of 2017.

Profit taking contributed to the early weakness among treasuries as traders cashed in on the strong upward move seen over the past several sessions.

Selling pressure waned over the course of the morning, however, as treasuries continued to benefited fro their appeal as a safe haven amid ongoing trade concerns.

Amid a continued escalation of the rhetoric, Chinese Vice Foreign Minister Zhang Hanhui accused the U.S. of "economic terrorism" by raising tariffs on Chinese goods.

"We oppose a trade war but are not afraid of a trade war," Zhang said. "This kind of deliberately provoking trade disputes is naked economic terrorism, economic homicide, economic bullying."

A report from Bloomberg News indicating China has put purchases of U.S. soybeans on hold added to concerns about a trade war.

On the U.S. economic front, the Labor Department released a report showing a modest uptick in first-time claims for U.S. unemployment benefits in the week ended May 25th.

The report said initial jobless claims edged up to 215,000, an increase of 3,000 from the previous week's revised level of 212,000.

A separate report from the Commerce Department showed U.S. economic growth in the first quarter accelerated by slightly less than initially estimated.

The Commerce Department said real gross domestic product surged up by 3.1 percent in the first quarter, reflecting a slight downward from revision from the previously reported 3.2 percent jump.

The downwardly revised increase in GDP, which matched economist estimates, still represented a notable acceleration from the 2.2 percent growth seen in the fourth quarter of 2018.

Meanwhile, the National Association of Realtors released a report showing pending home sales unexpectedly pulled back in the month of April.

NAR said its pending home sales index tumbled by 1.5 percent to 104.3 in April after surging up by 3.9 percent to an upwardly revised 105.9 in March.

The pullback came as a surprise to economists, who had expected pending home sales to climb by 0.9 percent compared to the 3.8 percent jump originally reported for the previous month.

News of the trade front is likely to remain in focus on Friday, although traders are also likely to keep an eye on reports on personal income and spending, consumer sentiment, and Chicago-area business activity.

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