Treasuries Close Slightly Higher Amid Continued Economic Optimism

(RTTNews) - After coming under pressure over the course of the two previous sessions, treasuries saw some further downside during trading on Thursday.

Bond prices moved lower in morning trading before regaining some ground in the afternoon but still closing in the red. Subsequently, the yield on the benchmark ten-year note, which moves opposite of prices, edged up by less than a basis point to 2.99 percent.

The slight increase on the day extended a recent upward trend by the ten-year yield, which reached its highest closing level in over three years.

Optimism about the outlook for the economy contributed to weakness among treasuries following the release of a report from the Labor Department showing a steep drop in weekly jobless claims in the week ended December 21st.

The Labor Department said initial jobless claims tumbled to 338,000, a decrease of 42,000 from the previous week's revised figure of 380,000. Economists had expected claims to drop to 340,000 from the 379,000 originally reported for the previous week.

The notable decrease partly offset the sharp jump seen in the first week of December, reflecting the volatility typically seen during the holiday season.

The data still added to a recent string of positive reports that have generated optimism that the economic momentum is strong enough to withstand the Federal Reserve's recently announced decision to begin scaling back its stimulus program.

Nonetheless, trading activity was relatively subdued, as many traders remained away from their desks following the Christmas Day holiday on Wednesday.

Trading activity could be even light on Friday amid a lack of major U.S. economic data.