Treasuries Close Modestly Higher Ahead Of Yellen's Speech

(RTTNews) - After drifting lower over the course of the three previous sessions, treasuries moved back to the upside during trading on Thursday.

Bond prices lingered near the unchanged line for much of the session before climbing more firmly into positive territory late in the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 1.9 basis points to 2.407 percent.

The modest rebound by treasuries came as traders looked ahead to Federal Reserve Chair Janet Yellen's speech at the Kansas City Fed's economic policy symposium in Jackson Hole, Wyoming.

Yellen, who is scheduled to speak at 10 am ET on Friday, is expected to deliver a dovish message in her remarks about the labor market.

"Her hopes for an increase in the labor force participation rate will likely be her focus," said Peter Boockvar, managing director at the Lindsey Group. "If she gets it, the supply of labor will be able to offset the rising demand for it."

He added, "If she's wrong and those discouraged workers are not coming back because the reward of work isn't much different than the proceeds of the social safety net, then she's got a big problem in terms of the timing of her monetary policy exit strategy timeline."

With the focus on Yellen's upcoming remarks, traders largely shrugged off a slew of better than expected U.S. economic data.

The National Association of Realtors released a report showing that existing home sales climbed to a seasonally adjusted annual rate of 5.15 million in July from a downwardly revised 5.03 million in June. Economists had expected existing home sales to drop to a rate of 5.00 million.

With the unexpected increase, existing home sales rose to their highest annual rate since reaching 5.26 million in September of last year.

The Labor Department also reported a slightly bigger than expected drop in initial jobless claims in the week ended August 16th.

The report said jobless claims dropped to 298,000, a decrease of 14,000 from the previous week's revised level of 312,000. Economists had been expecting jobless claims to pull back to 300,000.

Additionally, the Philadelphia Federal Reserve said its index of regional manufacturing activity unexpectedly reached a new three-year high in August.

Yellen's remarks will be in the spotlight on Friday amid a lack of major U.S. economic data, although European Central Bank President Mario Draghi is also due to speak.