Treasuries Close Moderately Lower After Seeing Early Strength

(RTTNews) - After moving modestly higher in early trading, treasuries turned lower over the course of the trading session on Thursday.

Bond prices pulled back well off their early highs and ended the day in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose 2.5 basis points to 1.90 percent after hitting a low of 1.853 percent.

The downturn by treasuries was partly due to renewed concerns about the outlook for interest rates following comments from St. Louis Federal Reserve President James Bullard.

Bullard said the relatively minor downgrades to the Fed's economic outlook suggest the next rate hike "may not be far off provided that the economy evolves as expected."

Earlier this week, Chicago Fed President Charles Evans said he sees strong economic growth and said the U.S. is close to achieving the Fed's employment mandate.

Evans said he agrees with the central bank's new median projection for interest rates at year's end, which would reflect two rate increases.

On the U.S. economic front, the Labor Department released a report this morning showing a modest increase in initial jobless claims in the week ended March 19th.

The Labor Department said initial jobless claims edged up to 265,000, an increase of 6,000 from the previous week's downwardly revised level of 259,000.

Economists had expected jobless claims to inch up to 268,000 from the 265,000 originally reported for the previous week.

A separate report from the Commerce Department showed a pullback in durable goods orders in the month of February.

The Commerce Department said durable goods orders fell by 2.8 percent in February after surging up by a revised 4.2 percent in January. Economists had expected durable goods orders to drop by 3.0 percent.

Excluding orders for transportation equipment, durable goods orders slid by 1.0 percent in February after climbing by 1.2 percent in January. Ex-transportation orders had been expected to dip by 0.2 percent.

Following the long Easter weekend, next week's trading is likely to be impacted by some key economic data, including the monthly jobs report due next Friday.

Traders are also likely to keep an eye on remarks by Fed Chair Janet Yellen, who is scheduled to deliver a speech next Tuesday to the Economic Club of New York.

Additionally, the Treasury Department is due to auction $26 billion worth of two-year notes next Monday, $34 billion worth of five-year notes next Tuesday and $28 billion worth of seven-year notes next Wednesday.