Treasuries Extend Downward Trend With Modestly Lower Close

(RTTNews) - Treasuries moved modestly lower during trading on Thursday, extending the downward trend seen over the past several sessions.

Bond prices drifted lower over the course of morning trading and remained in the red going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.5 basis points to 2.245 percent.

With the modest increase, the ten-year yield closed higher for the sixth time in seven sessions, reaching its highest closing level in well over a month.

The ongoing weakness among treasuries came as traders continued to react to Federal Reserve Chair Janet Yellen's comments on Wednesday.

In testimony before the House Financial Services Committee, Yellen said a December interest rate hike would be a "live possibility" if the incoming economic data supports such a move.

As a result, traders are likely to keep a particularly close eye on the Labor Department's monthly jobs report due to be released tomorrow morning.

Economists expect the report to show an increase of about 190,000 jobs in October following the addition of 142,000 jobs in September. The unemployment rate is expected to dip to 5.0 percent from 5.1 percent.

The Labor Department released a report this morning showing that initial jobless claims rose more than expected in the week ended October 31st.

The report said initial jobless claims climbed to 276,000, an increase of 16,000 from the previous week's unrevised level of 260,000. Economists had expected jobless claims to inch up to 262,000.

Meanwhile, a separate report from the Labor Department showed an unexpected increase in labor productivity in the third quarter.

The Labor Department said productivity climbed 1.6 percent in third quarter following an upwardly revised 3.5 percent jump in the second quarter. Productivity had been expected to edge down by 0.2 percent.

The report also said unit labor costs rose by 1.4 percent in the third quarter after tumbling by 1.8 percent in the second quarter. Economists had expected costs to surge up by 2.3 percent.

The monthly jobs report and its impact on the outlook for interest rates is likely to be the main driver of trading on Friday.