After coming under pressure in early trading on Thursday, treasuries regained some ground over the course of the session.
Bond prices climbed well off their worst levels of the day but still closed modestly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.1 basis points to 2.046 percent after reaching a high of 2.11 percent.
While the ten-year yield ended the session well off its highs, it still finished the day at its best closing level in well over a month.
The early weakness among treasuries was partly due to ongoing uncertainty about the outlook for interest rates following the Federal Reserve’s monetary policy announcement on Wednesday.
The Fed’s statement failed to provide specific guidance regarding interest rates, although several analysts noted the central bank did not rule out a rate hike at the June meeting.
In the statement issued followed the March meeting, the Fed said an interest rate hike at the April meeting was unlikely, but the central bank did not make a similar declaration in yesterday’s statement.
Negative sentiment may also have been generated by a report from the Labor Department showing that initial jobless claims pulled back to a fifteen-year low in the week ended April 25th.
The Labor Department said initial jobless claims dropped to 262,000, their lowest level since hitting 259,000 in the week ended April 15, 2000.
Nonetheless, selling pressure waned over the course of morning trading, as some traders felt the pullback was overdone.
The subsequent recovery attempt by treasuries may have reflected a sell-off that emerged on Wall Street, which dragged the Dow down by more than 200 points.
Trading on Friday may be impacted by another batch of U.S. economic data, with traders likely to keep an eye on reports on manufacturing activity, consumer sentiment, and construction spending.
The material has been provided by InstaForex Company – www.instaforex.com