logo
Plus   Neg
Share
Email

Treasuries Pull Back Off Best Levels But Close Modestly Higher

Following the pullback seen over the two previous sessions, treasuries moved back to the upside during trading on Thursday.

Bond prices saw initial strength but gave back ground over the course of the session to close only modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.3 basis points to 1.617 percent.

The modest strength among treasuries came as traders looked for safe havens amid news of a jump in new coronavirus cases.

Officials revealed an additional 242 deaths from the coronavirus in the Chinese province of Hubei as well as 14,840 new confirmed cases.

While the jump in confirmed cases was partly due to the adoption of new methodology for counting infections, the spike has still led to renewed fears about the outbreak.

On the U.S. economic front, the Labor Department released a report showing a modest increase in consumer prices in the month of January.

The Labor Department said its consumer price index inched up by 0.1 percent in January after rising by 0.2 percent in December. Economists had expected prices to increase by 0.2 percent.

Core consumer prices, which exclude food and energy prices, rose by 0.2 percent in January after ticking up by 0.1 percent in the previous month. The increase in core prices matched economist estimates.

A separate report from the Labor Department showed first-time claims for U.S. unemployment benefits inched up by less than expected in the week ended February 8th.

The report said initial jobless claims crept up to 205,000, an increase of 2,000 from the previous week's revised level of 203,000.

Economists had expected jobless claims to rise to 210,000 from the 202,000 originally reported for the previous week.

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

The thirty-year bond auction drew a high yield of 2.061 percent and a bid-to-cover ratio of 2.43, while the ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.28.

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

Traders have not paid much attention to U.S. economic data recently but are likely to keep an eye on Friday's reports on retail sales, industrial production and consumer sentiment.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Follow RTT