Treasuries Move Back To The Downside

Trading 11 avr 2019 Donner votre avis

After moving higher over the two previous sessions, treasuries gave back some ground during the trading day on Thursday.

Bond prices moved to the downside early in the session and remained in negative territory throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.7 basis points to 2.504 percent.

The pullback by treasuries came after the Labor Department released a report showing first-time claims for U.S. unemployment benefits once again slid to their lowest level in nearly 50 years in the week ended April 6th

The report said initial jobless claims fell to 196,000, a decrease of 8,000 from the previous week's revised level of 204,000.

The continued drop surprised economists, who had expected jobless claims to rise to 211,000 from the 202,000 originally reported for the previous week.

With the unexpected decrease, initial jobless claims fell to their lowest level since hitting 193,000 in October of 1969.

Meanwhile, a separate Labor Department report showed a spike in energy prices contributed to a bigger than expected increase in U.S. producer prices in the month of March.

The Labor Department said its producer price index for final demand climbed by 0.6 percent in March after inching up by 0.1 percent in February. Economists had expected prices to rise by 0.3 percent.

Core producer prices, which exclude food and energy prices, also rose by 0.3 percent in March following a 0.1 percent uptick in February. Core prices had been expected to edge up by 0.2 percent.

Compared to the same month a year ago, producer prices were up by 2.2 percent in March, reflecting an acceleration from the 1.9 percent increase in February.

Meanwhile, the annual rate of growth in core consumer prices edged down to 2.4 percent in March from 2.5 percent in the previous month.

"The upshot is that the producer price data are consistent with consumer price inflation remaining slightly below the Fed's target," said Paul Ashworth, Chief U.S. Economist at Capital Economics.

Treasuries saw continued weakness following the release of the results of the Treasury Department's auction of $16 billion worth of thirty-year bonds, which attracted average demand.

The thirty-year bond auction drew a high yield of 2.930 percent and a bid-to-cover ratio of 2.25, while the ten previous seven-year note auctions had an average bid-to-cover ratio of 2.28.

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.


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