Treasuries Close Notably Lower As ECB Expands Asset Purchases

(RTTNews) - Extending the downward move seen in the previous session, treasuries moved notably lower during trading on Thursday.

Bond prices moved steadily lower for much of the session before moving roughly sideways going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.3 basis points to 1.896 percent.

The continued weakness among treasuries came following European Central Bank President Mario Draghi's announcement of an expanded asset purchase program.

Draghi said the ECB will purchase 60 billion euros per month worth of securities, including investment grade sovereign bonds, beginning in March.

The expanded asset purchase program is currently scheduled to last until September of 2016, although Draghi said purchases would continue until there is a sustained improvement in inflation.

Optimism about the additional stimulus providing a boost to the European economy seemed to overshadow any concerns about potential risks to the national central banks.

The news out of Europe largely overshadowed a report from the Labor Department showing a modest drop in first-time claims for U.S. unemployment benefits in the week ended January 17th.

The report said initial jobless claims fell to 307,000, a decrease of 10,000 from the previous week's revised level of 317,000. Economists had expected jobless claims to slide to 300,000.

Meanwhile, the Treasury Department also announced the details of next week's auctions of two-year, five-year, and seven-year notes.

The Treasury said it plans to sell $26 billion worth of two-year notes next Tuesday, $35 billion worth of five-year notes next Wednesday, and $29 billion worth of seven-year notes next Thursday.

While reaction to the ECB announcement may continue to impact trading on Friday, traders are also likely to keep an eye on reports on U.S. existing home sales and leading economic indicators.