Treasuries Climb Off Worst Levels But Remain Firmly Negative

After trending higher over the past few sessions, treasuries gave back some ground during the trading day on Thursday.

Bond prices climbed off their worst levels after an early move to the downside but remained firmly negative. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 5.6 basis points to 2.960 percent.

The pullback by treasuries came as a report from the Labor Department showing U.S. producer prices increased by more than expected in the month of June added to concerns about aggressive interest rate hikes by the Federal Reserve.

The Labor Department said its producer price index for final demand jumped by 1.1 percent in June after climbing by an upwardly revised 0.9 percent in May.

Economists had expected producer prices to increase by 0.8 percent, matching the advance originally reported for the previous month.

The annual rate of producer price growth accelerated to 11.3 percent in June, reflecting the largest spike since a record 11.6 percent jump in March.

Economists had expected the annual rate of producer price growth to slow to 10.7 percent in June from 10.9 percent in May.

The Labor Department released a separate report on Wednesday showing U.S. consumer prices also surged by more than expected in the month of June.

Another report from the Labor Department showed first-time claims for U.S. unemployment benefits unexpectedly inched higher in the week ended July 9th.

The report showed initial jobless claims crept up to 244,000, an increase of 9,000 from the previous week’s unrevised level of 235,000. The uptick surprised economists, who had expected jobless claims to come in unchanged.

Trading on Friday may be impacted by reaction to a slew of U.S. economic data, including reports on retail sales, industrial production and consumer sentiment.

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