Treasuries Resume Recent Downward Trend

(RTTNews) - Following the modest rebound seen in the previous session, treasuries showed a notable move back to the downside during trading on Thursday.

Bond prices came under pressure early in the session and remained firmly negative throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.6 basis points to 2.370 percent.

With the increase on the day, the ten-year yield extended a recent uptrend to reach its highest closing level in well over a month.

The weakness among treasuries came following the release of a slew of U.S. economic data, including a report from the Institute for Supply Management showing an unexpected acceleration in the pace of growth in the service sector in the month of June.

The ISM said its non-manufacturing index rose to 57.4 in June from 56.9 in May, with a reading above 50 indicating growth in the service sector. Economists had expected the index to edge down to 56.5.

Meanwhile, payroll processor ADP released a report showing weaker than expected private sector job growth in the month of June.

ADP said private sector employment climbed by 158,000 jobs in June after jumping by a revised 230,000 jobs in May.

Economists had expected an increase of about 185,000 jobs compared to the addition of 253,000 jobs originally reported for the previous month.

The release of the report from ADP comes a day ahead of the release of the Labor Department's monthly jobs report, which includes both private and public sector jobs.

A separate report from the Labor Department showed an uptick in first-time claims for unemployment benefits in the week ended July 1st.

The report said initial jobless claims edged up to 248,000, an increase of 4,000 from the previous week's unrevised level of 244,000. Economists had expected jobless claims to dip to 243,000.

With exports rising and imports falling, the Commerce Department released a report showing that the U.S. trade deficit narrowed in the month of May.

The Commerce Department said the trade deficit narrowed to $46.5 billion in May from $47.6 billion in April. Economists had expected the deficit to narrow to $46.2 billion.

Trading on Friday is likely to be driven by reaction to the monthly jobs report, which is expected to show an increase of 179,000 jobs in June.