Treasuries Close Moderately Lower After Volatile Session

(RTTNews) - Treasuries saw considerable volatility over the course of the trading day on Thursday but eventually ended the session moderately lower.

Bond prices bounced back and forth for much of the day before moving to the downside going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.5 basis points to 2.438 percent.

With the increase on the day, the ten-year yield regained some ground after ending the previous session at its lowest closing level in almost a month.

The lower close by treasuries was partly due to uncertainty ahead of the Labor Department's closely watched monthly jobs report on Friday.

Economists expect the report to show an increase of about 215,000 jobs, while the unemployment rate is expected to come in unchanged at 6.1 percent.

While strong job growth would be a positive sign for the economy, it could also add to recent concerns about the outlook for interest rates.

Generating some optimism about the report, the Labor Department released a separate report this morning showing an unexpected drop in initial jobless claims in the week ended September 27th.

The report said initial jobless claims fell to 287,000 from the previous week's revised level of 295,000, while economists had expected jobless claims to edge up to 297,000.

Meanwhile, traders were also digesting remarks by European Central Bank President Mario Draghi, who provided some details regarding the bank's bond purchase plans.

Draghi revealed that the ECB will start buying covered bonds in mid-October and asset-backed securities at some point in the fourth quarter.

"As expected, the ECB fleshed out details of its Asset Backed Securities and covered bond buying programs, but it did little to suggest that there are any further policy initiatives imminent," said Howard Archer, Chief U.K. and European Economist at IHS Global Insight.

He added, "In particular, the ECB does not appear poised to pull the QE trigger in the immediate future at least, which likely at least partly reflects intense German opposition to such a move."

While the monthly jobs report is likely to be in spotlight on Friday, traders will also be presented with U.S. reports on international trade and service sector activity.