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Treasuries Extend Upward Move With Modest Advance

Extending the advance seen over the past few sessions, treasuries showed another modest move to the upside during trading on Thursday.

Bond prices fluctuated after an initial upward move but managed to remain in positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.3 basis points to 0.582 percent.

The ten-year yield moved lower for the fourth consecutive session, ending the day at its lowest closing level in three months.

Treasuries benefited from the release of some disappointing U.S. economic data, including a Labor Department report showing first-time claims for U.S. unemployment benefits increased for the first time in sixteen weeks.

The report said initial jobless claims jumped to 1.416 million in the week ended July 18th, an increase of 109,000 from the previous week's revised level of 1.307 million.

Economists had expected jobless claims to come in unchanged compared to the 1.300 million originally reported for the previous month.

Jobless claims increased for the first time since late March but remain well below the record high of 6.867 million set in the week ended March 28th.

"The labor market remains in a precarious place as Covid-19 cases surge in some parts of the country and stricter measures are adopted in response," said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.

She added, "Claims data from the last few weeks point to layoffs and less rehiring in possible signs of job losses in July payroll employment.

A separate report from the Conference Board showed its reading on leading U.S. economic indicators increased by less than expected in the month of June.

The Conference Board said its leading economic index jumped by 2.0 percent in June after soaring by an upwardly revised 3.2 percent in May and plunging by 6.3 percent in April.

Economists had expected the index to surge up by 2.5 percent in June compared to the 2.8 percent spike originally reported for the previous month.

Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board, noted labor market conditions and stock prices made particularly strong positive contributions.

"However, broader financial conditions and the consumers' outlook on business conditions still point to a weak economic outlook," Ozyildirim said.

He added, "Together with a resurgence of new COVID-19 cases across much of the nation, the LEI suggests that the U.S. economy will remain in recession territory in the near term."

The strength among treasuries also came as stocks on Wall Street moved sharply lower over the course of the trading day.

A report on new home sales may attract some attention on Friday, although traders are also likely to keep an eye on rising tensions between the U.S. and China and the latest coronavirus news.

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