Treasuries Recover From Early Weakness Amid Sell-Off On Wall Street

After moving to the downside early in the session, treasuries showed a notable turnaround over the course of the trading day on Thursday.

Bond prices climbed well off their early lows and firmly into positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 8.8 basis points to 3.307 percent.

The rebound by treasuries likely to reflected their appeal as a safe haven amid the sharp pullback by stocks on Wall Street.

The major U.S. stock indexes have fallen to their lowest intraday levels in well over a year amid concerns aggressive monetary policy action by central banks around the world may trigger a global recession.

In U.S. economic news, the Labor Department released a report showing a modest decrease in first-time claims for U.S. unemployment benefits in the week ended June 11th.

The report showed initial jobless claims edged down to 229,000, a decrease of 3,000 from the previous week’s revised level of 232,000.

Economists had expected jobless claims to dip to 220,000 from the 229,000 originally reported for the previous week.

Meanwhile, a separate released by the Commerce Department showed new residential construction in the U.S. plunged by much more than expected in the month of May.

The Commerce Department said housing starts tumbled by 14.4 percent to an annual rate of 1.549 million in May after jumping by 5.5 percent to a revised rate of 1.810 million in April.

Economists had expected housing starts to decrease by 1.3 percent to an annual rate of 1.701 million from the 1.724 million originally reported for the previous month.

The report also showed building permits slumped by 7.0 percent to an annual rate of 1.695 million in May after falling by 3.0 percent to a revised rate of 1.823 million in April.

Building permits, an indicator of future housing demand, were expected to decline by 1.9 percent to an annual rate of 1.785 million from the 1.819 million originally reported for the previous month.

The Federal Reserve Bank of Philadelphia also released a report showing a modest contraction in regional manufacturing activity in the month of June.

Trading on Friday may be impacted by remarks by Fed Chair Jerome Powell as well as a report on industrial production.

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