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Treasuries Extend Rally Amid Sell-Off On Wall Street

Extending the strong upward move seen in recent sessions, treasuries showed another significant move to the upside during trading on Thursday.

Bond prices jumped at the start of trading and saw further upside as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled by 9.5 basis points to 0.653 percent.

The rally by treasuries came as traders looked to the relative safety of bonds as stocks on Wall Street showed a steep drop amid concerns about a second wave of coronavirus cases.

Recent data has led to worries about economic reopening leading to a spike in infections, with data CNN aggregated from the Covid Tracking Project showing the number of coronavirus hospitalizations since Memorial Day has risen in at least a dozen states.

Texas reported 2,504 new coronavirus cases on Wednesday, reflecting the highest one-day total in the state since the pandemic emerged.

The number of confirmed coronavirus cases in the U.S. has also passed the two-million mark, according to data from Johns Hopkins University.

Meanwhile, as businesses reopen, the Labor Department released a report showing a continued decrease in first-time claims for U.S. unemployment benefits in the week ended June 6th.

The report said initial jobless claims tumbled to 1.542 million, a decrease of 355,000 from the previous week's revised level of 1.897 million.

Economists had expected jobless claims to slump to 1.550 million from the 1.877 million originally reported for the previous week.

Jobless claims declined for the tenth straight week after reaching a record high of 6.867 million in the week ended March 28th.

A separate report from Labor Department showed a much bigger than expected increase in U.S. producer prices in the month of May.

The Treasury Department also revealed that its auction of $19 billion worth of thirty-year bonds attracted average demand.

The thirty-year bond auction drew a high yield of 1.450 percent and a bid-to-cover ratio of 2.30, while the ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.34.

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

Trading on Friday may be impacted by reaction to reports on import and export prices and consumer sentiment, although traders are also likely to keep an eye on news on the coronavirus front.

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