Treasuries showed a strong upward move over the course of the trading day on Thursday, benefiting from the release of a batch of disappointing U.S. economic data.
After initially showing a lack of direction, bond prices moved steadily higher as the day progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 6.3 basis points to 1.702 percent.
With the drop, the ten-year yield extended the downward move seen in recent weeks, ending the day at a record closing low.
The strength among treasuries came on the heels of the release of some weaker than expected U.S. economic data, including a report from the Philadelphia Federal Reserve showing an unexpected contraction in regional manufacturing activity in the month of May.
The Philly Fed said its diffusion index of current activity tumbled to a negative 5.8 in May from a positive 8.5 in April, with a negative reading indicating a contraction in regional manufacturing activity. The drop surprised economists, who had expected the index to climb to a reading of 10.0.
Adding to the buying interest, a separate report from the Conference Board showed an unexpected drop by its leading economic indicators index.
The leading economic index edged down by 0.1 percent in April following a 0.3 percent increase in March, while economists had expected the index to inch up by 0.1 percent.
Earlier in the day, the Labor Department released a report showing that initial jobless claims unexpectedly came in unchanged in the week ended May 12th.
The report said jobless claims came in at 370,000, unchanged from the previous week's revised figure. Economists had expected jobless claims to edge down to 365,000 from the 367,000 originally reported for the previous week.
Lingering uncertainty about the financial situation in Europe also contributed to the strength among treasuries, with traders keeping an eye on the latest developments in Greece.
Meanwhile, the Treasury Department announced the details of next week's auctions of two-year, five-year, and seven-year notes.
The Treasury said it plans to auction $35 billion worth of two-year notes next Tuesday, $35 billion worth of five-year notes next Wednesday, and $29 billion worth of seven-year notes next Thursday.
The economic calendar on Friday is relatively light following the release of a slew of data over the past few days. Subsequently, traders are likely to focus on the latest developments overseas.
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