Treasuries Fluctuate Before Closing Firmly Positive

Treasuries fluctuated over the course of the trading session on Thursday before ending the day firmly in positive territory.

Bond prices gave back ground after an initial advance but moved back to the upside as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 5.9 basis points to 1.297 percent.

The higher close by treasuries came following the release of a slew of U.S. economic data, including a report from the Federal Reserve showing industrial production increased by less than expected in the month of June.

The Fed said industrial production rose by 0.4 percent in June after climbing by a downwardly revised 0.7 percent in May. Economists had expected industrial production to increase by 0.7 percent.

The weaker than expected growth was partly due to a 0.1 percent dip in manufacturing output, which came as an ongoing shortage of semiconductors contributed to a 6.6 percent nosedive in the production of motor vehicles and parts.

The Labor Department also released a report showing first-time claims for unemployment benefits decreased in line with economist estimates in the week ended July 10th.

The report said initial jobless claims fell to 360,000, a decrease of 26,000 from the previous week’s revised level of 386,000.

Economists had expected jobless claims to dip to 360,000 from the 373,000 originally reported for the previous week.

With the decrease, initial jobless claims once again fell to their lowest level since hitting 256,000 in the week ended March 14, 2020.

A separate report released by the Labor Department showed U.S. import prices increased in line with economist estimates in the month of June.

Meanwhile, separate reports from the New York Federal Reserve and the Philadelphia Federal Reserve showed mixed readings on the pace of growth in manufacturing activity in the two regions.

Treasuries may have benefited from renewed concerns about the global economic outlook after a report from China’s National Bureau of Statistics showed Chinese GDP growth slowed by more than expected in the second quarter.

The report showed Chinese GDP grew 7.9 percent year-on-year in the second quarter, shy of expectations for a gain of 8.1 percent and down sharply from 18.3 percent in the three months prior.

Trading on Friday may be impacted by reaction to another batch of U.S. economic data, including reports on retail sales and consumer sentiment.

Source: Read Full Article