Treasuries Turn Positive Amid Sharp Pullback On Wall Street

After moving to the downside in morning trading on Thursday, treasuries showed a notable turnaround over the course of the afternoon.

Bond prices climbed well off their lows of the session and into positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.8 basis points to 0.685 percent after reaching a high of 0.723 percent.

The rebound by treasuries was partly due to a downturn by stocks on Wall Street, which came under pressure after extending yesterday’s rebound early in the session.

Tech stocks helped to lead the way lower after driving the rebound on Wednesday, which came on the heels of a substantial three-day sell-off.

Treasuries followed through on their recovery attempt following the release of the results of the Treasury Department’s auction of $23 billion worth of thirty-year bonds.

The Treasury revealed that the thirty-year bond auction drew a high yield of 1.473 percent and a bid-to-cover ratio of 2.31.

The bid-to-cover ratio, a measure of demand, came in slightly below the recent average of 2.36 but was well above last month’s 2.14.

On the U.S. economic front, the Labor Department released a report showing first-time claims for U.S. unemployment benefits unexpectedly came in unchanged in the week ended September 5th.

The Labor Department said initial jobless claims came in at 884,000, unchanged from the previous week’s revised level. Economists had expected jobless claims to drop to 846,000 from the 881,000 originally reported for the previous week.

The report also showed an increase in continuing claims, a reading on the number of people receiving ongoing unemployment assistance.

A separate report from the Labor Department showed producer prices in the U.S. increased by slightly more than expected in the month of August.

The Labor Department said its producer price index for final demand rose by 0.3 percent in August after climbing by 0.6 percent in July. Economists had expected prices to edge up by 0.2 percent.

Excluding food and energy prices, core producer prices increased by 0.4 percent in August following a 0.5 percent advance in July. Core prices were also expected to tick up by 0.2 percent.

A report on consumer price inflation may attract some attention on Friday, although bond trading may continue to be driven by activity on Wall Street.

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