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Treasuries Moved Modestly Lower On Upbeat Economic Data

After ending nearly unchanged for two consecutive sessions, treasuries moved modestly lower during trading on Thursday.

Bond prices regained some ground after an early move to the downside but remained in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.9 basis points to 1.109 percent.

The modest weakness among treasuries came following the release of a batch of upbeat U.S. economic data, including a report from the Labor Department showing a pullback in initial jobless claims in the week ended January 16th.

The report said initial jobless claims fell to 900,000, a decrease of 26,000 from the previous week's revised level of 926,000.

Economists had expected jobless claims to drop to 910,000 from the 965,000 originally reported for the previous week.

Even with the downward revision, the number of claims in the previous week represented the most since reaching 1.011 million in the week ended August 22nd.

The Commerce Department also released a report showing new residential construction in the U.S. jumped by much more than expected in the month of December.

The report said housing starts spiked by 5.8 percent to an annual rate of 1.669 million in December from the revised November estimate of 1.578 million.

Economists had expected housing starts to climb by 0.8 percent to a rate of 1.560 million from the 1.547 million originally reported for the previous month.

The Commerce Department said building permits also surged up by 4.5 percent to an annual rate of 1.709 million in December from the revised November rate of 1.635 million.

Building permits, an indicator of future housing demand, had been expected to slump by 2.1 percent to a rate of 1.604 million from the 1.639 million originally reported for the previous month.

Another report released by the Federal Reserve Bank of Philadelphia showed a substantial acceleration in the pace of growth in regional manufacturing activity in the month of January.

Optimism about ramped up efforts to combat the coronavirus under new President Joe Biden also reduced the appeal of safe havens such as bonds.

Biden has revealed new details of his plan to tackle the pandemic, which includes providing more state and local funding to accelerate the vaccine rollout and using the Defense Production Act to increase production of personal protective equipment.

A report on existing home sales may attract some attention on Friday, with existing home sales expected to slump by 1.4 percent in December.

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