Treasuries moved to the upside during trading on Thursday, extending the upward move seen over the course of the previous session.
Bond prices moved higher in early trading and remained firmly positive throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.5 basis points to 1.903 percent.
The strength among treasuries came as traders continued to digest the Federal Reserve’s monetary policy announcement on Wednesday.
As was widely expected, the Fed left interest rates unchanged in a range from 0.25 percent to 0.50 percent, although Kansas City Fed President Esther George preferred raising rates by a quarter point.
The central bank’s revised forecast for interest rates also shows that officials now expect two rate hikes by the end of this year compared to the four predicted back in December.
The new median projection calls for rates at 0.9 percent at year’s end, down from the previous estimate of 1.4 percent.
Traders were also reacting to the latest U.S. economic data, including a report from the Philly Fed showing an unexpected expansion in regional manufacturing activity in the month of March.
The Philly Fed said its diffusion index for current activity jumped to a positive 12.4 in March from a negative 2.8 in February, with a positive reading indicating growth in regional manufacturing activity.
The index recorded its first positive reading in seven months, while economists had expected a much more modest increase to a negative 1.4.
A separate report from the Labor Department showed a smaller than expected rebound in initial jobless claims in the week ended March 12th.
The report said jobless claims rose to 265,000, an increase of 7,000 from the previous week’s revised level of 258,000. Economists had expected jobless claims to climb to 270,000.
Meanwhile, the Conference Board released a report showing that its index of leading economic indicators inched up by 0.1 percent in February compared to expectations for a 0.2 percent increase.
The economic calendar for Friday is relatively quiet compared to the past few days, although a report on consumer sentiment may still attract some attention.
The material has been provided by InstaForex Company – www.instaforex.com