Treasuries Extend Yesterday's Upward Move Amid Mixed Data

(RTTNews) - After moving notably higher over the course of the previous session, treasuries saw some further upside during trading on Thursday.

Bond prices moved steadily higher as the day progressed, closing firmly in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.2 basis points to 2.606 percent.

With the drop, the ten-year yield added to the 4.7 basis point loss posted on Wednesday, falling to a nearly three-month closing low.

The continued strength among treasuries seemed to reflect the appeal of safe havens such as bonds ahead of the release of the closely watched monthly jobs report on Friday.

Economists expect the Labor Department report to show an increase of about 215,000 jobs in April following the addition of 192,000 jobs in March. The unemployment rate is also expected to edge down to 6.6 percent from 6.7 percent.

Treasuries also seemed to benefit from the release of a mixed batch of economic data, including encouraging reports on personal spending and manufacturing activity but disappointing readings on weekly jobless claims and construction spending.

The Commerce Department released a report early in the day showing that personal spending surged up by 0.9 percent in March following an upwardly revised 0.5 percent increase in February. Spending had been expected to increase by about 0.6 percent.

The jump in spending, the biggest monthly increase since August of 2009, came amid a bigger than expected increase in personal income.

Additionally, the Institute for Supply Management released a report showing that its index of U.S. manufacturing activity rose by more than expected in the month of April.

The ISM said its purchasing managers index climbed to 54.9 in April from 53.7 in March, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to edge up to a reading of 54.3.

Meanwhile, the Labor Department released a separate report showing an unexpected increase in initial jobless claims in the week ended April 26th.

The report said initial jobless claims climbed to 344,000, an increase of 14,000 from the previous week's revised level of 330,000. The increase came as a surprise to economists, who had expected jobless claims to dip to 320,000.

The Commerce Department also released a report showing that construction spending rose by less than expected in the month of March.

Trading on Friday is likely to be driven by reaction to the monthly jobs report, although the Commerce Department is also scheduled to release its monthly report on factory orders.