Treasuries Edge Higher As Jobless Claims Drop Less Than Expected
Treasuries moved modestly higher during trading on Thursday, extending the recovery from the initial drop seen in the previous session.
Bond prices moved to the upside early in the session and remained in positive territory throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.8 basis points to 0.612 percent.
Treasuries benefited from their appeal as a safe haven following the release of a report from the Labor Department showing the decline in first-time claims for unemployment benefits nearly ground to a halt last week.
The Labor Department said initial jobless claims slipped to 1.300 million in the week ended July 11th, a decrease of just 10,000 from the previous week’s revised level 1.310 million.
Economists had expected jobless claims to drop to 1.250 million from the 1.314 million originally reported for the previous week.
Jobless claims fell for the fifteenth consecutive week, although the pace of decline has slowed considerably from April and May.
The economic concerns raised by the report were partly offset by a report from the Commerce Department showing another substantial increase in retail sales in June, although the data was seen as old news as some states roll back their reopening plans due to a surge in coronavirus cases.
The report said retail sales soared by 7.5 percent in June after skyrocketing by an upwardly revised 18.2 percent in May.
Economists had expected retail sales to jump by 5.0 percent compared to the 17.7 percent spike originally reported for the previous month.
Excluding sales by motor vehicles and parts dealers, retail sales still shot up by 7.3 percent in May after soaring by 12.1 percent in May. Ex-auto sales were also expected to surge up by 5.0 percent.
A separate report from the National Association of Home Builders showed another substantial improvement in homebuilder confidence in the month of July.
The report said the NAHB/Wells Fargo Housing Market Index surged up to 72 in July after skyrocketing to 58 in June. Economists had expected the index to inch up to 60.
With the much bigger than expected jump, the NAHB noted the index now stands at the solid pre-pandemic reading in March before the coronavirus outbreak affected much of the nation.
Economic data may continue to attract attention on Friday, with traders likely to keep an eye on reports on housing starts and consumer sentiment.