Treasuries Move Notably Lower Amid Continued Jump In Oil Prices

(RTTNews) - Following the pullback seen in the previous session, treasuries showed another notable move to the downside during trading on Thursday.

Bond prices climbed off their worst levels in afternoon trading but closed firmly in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 7.3 percent basis points to 2.441 percent.

With the increase on the day, the ten-year yield extended its recent upward trend, reaching its highest closing level in well over a year.

The weakness among treasuries came amid another sharp increase in oil prices, which continued to benefit from news of OPEC's agreement to cut production.

Crude for January delivery jumped $1.62 to $51.06 a barrel after soaring $4.21 to $49.44 a barrel in the previous session.

The jump in oil prices has added to concerns about the outlook for inflation and the prospect for further tightening by the Federal Reserve beyond the widely anticipated interest rate hike later this month.

A report from the Institute for Supply Management showing an acceleration in the pace of growth in U.S. manufacturing activity also reduced the appeal of treasuries.

The ISM said its purchasing managers index climbed to 53.2 in November from 51.9 in October, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to inch up to 52.3.

With the bigger than expected increase, the index reached its highest level since a matching reading in June. The index has not been higher since early 2015.

Meanwhile, a separate report from the Labor Department showed that initial jobless claims climbed by much more than expected to reach a five-month high in the week ended November 26th.

The report said initial jobless claims rose to 268,000, an increase of 17,000 from the previous week's unrevised level of 251,000. Economists had expected jobless claims to inch up to 253,000.

Trading on Friday is likely to be driven by reaction to the Labor Department's more closely watched monthly employment report for November.

Employment is expected to increase by 170,000 jobs in November after climbing by 161,000 jobs in October, while the unemployment rate is expected to hold at 4.9 percent.