After trending lower in recent sessions, treasuries showed a strong move back to the upside on Thursday on the heels of the release of a batch of disappointing economic data.
Bond prices moved sharply higher in early trading and saw some further upside as the trading day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 7.8 basis points to 1.865 percent.
With the sharp drop on the day, the ten-year yield pulled back further off the nearly two-month closing high that it set on Tuesday.
The strength among treasuries came on the heels of the release of several disappointing economic reports, including a report from the Labor Department showing a bigger than expected increase in initial jobless claims in the week ended May 11th.
The report said initial jobless claims rose to 360,000, an increase of 32,000 from the previous week's revised figure of 328,000.
Economists had expected jobless claims to climb to 330,000 from the 323,000 originally reported for the previous week.
The Philadelphia Federal Reserve also released a report showing an unexpected contraction in regional manufacturing activity in May.
The report showed that the index of current activity fell to a negative 5.2 in May from a positive 1.3 in April, with a negative reading indicating a contraction in regional manufacturing activity. The drop came as a surprise to economists.
A separate report from the Commerce Department showed that housing starts tumbled 16.5 percent to a seasonally adjusted annual rate of 853,000 in April.
On the other hand, the report also showed that building permits, an indicator of future housing demand, jumped 14.3 percent to an annual rate of 1.017 million in April.
The Labor Department also released a report showing that consumer prices fell by slightly more than expected in April amid a sharp drop in energy prices.
Following today's slew of economic data, the economic calendar for Friday is relatively quiet, although traders are likely to keep an eye on reports on consumer sentiment and leading economic indicators.
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