Treasuries Show Modest Move Back To The Downside

(RTTNews) - After moving notably higher over the course of the two previous sessions, treasuries gave back some ground during trading on Thursday.

Bond prices moved to the downside early in the session and remained stuck in the red throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged up by 1.8 basis points to 2.432 percent.

The higher close by treasuries came following the release of a Labor Department report showing first-time claims for unemployment benefits unexpectedly came in unchanged in the week ended December 23rd.

The report said initial jobless claims came in at 245,000, unchanged from the previous week's unrevised level. Economists had expected jobless claims to dip to 240,000.

A separate report from MNI Indicators showed Chicago-area business activity unexpectedly expanded at a faster rate in the month of December.

MNI Indicators said its Chicago business barometer climbed to 67.6 in December from 63.9 in November, with a reading above 50 indicating growth.

The increase surprised economists, who had expected the business barometer to drop to 62.0. The unexpected advance lifted the index to its highest level since March of 2011.

Treasuries remained stuck in the red after the Treasury Department revealed its auction of $28 billion worth of seven-year notes attracted average demand.

The seven-year note auction drew a high yield of 2.370 percent and a bid-to-cover ratio of 2.55, while the ten previous seven-year note auctions had an average bid-to-cover ratio of 2.52.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

Trading on Friday is likely to be subdued as some traders look to get a head start on the New Year's weekend. A lack of major U.S. economic data may also contribute to light trading.