Treasuries Move Notably Lower Amid Brexit Voting

(RTTNews) - Treasuries moved notably lower during trading on Thursday as the referendum on whether Britain will remain in the European Union got underway in the U.K.

After coming under pressure in early trading, bond prices regained some ground but remained firmly in the red. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 5.4 basis points to 1.739 percent.

The weakness among treasuries came as traders seemed optimistic voters will oppose the so-called Brexit, although the results of the vote will not be known until much later in the day.

Capital Economics noted that the last few opinion polls appear to have largely convinced the markets that the U.K. will vote to remain in the EU.

"Despite how close most of the polls are, betting markets - which have consistently favored Remain - are increasingly confident that voters will choose to stay in the EU," Capital Economics said in a note.

The firm added, "Movements in financial markets have also reflected betting markets' view that a Brexit is looking increasingly unlikely."

Amid the focus on the Brexit vote, traders largely shrugged off a batch of U.S. economic data, including a Commerce Department report showing a pullback in new home sales in May.

The report said new home sales fell by 6.0 percent to an annual rate of 551,000 in May from the downwardly revised April rate of 586,000.

Economists had expected housing starts to slump by 8.7 percent to a rate of 565,000 from the 619,000 originally reported for the previous month.

While the April rate was downwardly revised, it still represents the highest rate of new home sales since February of 2008.

A separate report from the Labor Department said initial jobless claims fell to a nearly two-month low last week, while the Conference Board reported an unexpected drop by its index of leading economic indicators in May.

Trading on Friday is likely to be driven by reaction to the outcome of the Brexit vote, with the final results expected to be revealed overnight.

The results of referendum may overshadow the release of U.S. reports on durable goods orders and consumer sentiment.