Treasuries Close Slightly Higher Following Lackluster Session

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After ending the previous session modestly lower, treasuries turned in a lackluster performance during trading on Thursday.

Bond prices spent much of the day lingering near the unchanged line before closing slightly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1 basis point to 0.666 percent.

The choppy trading came following the release of a mixed batch of U.S. economic data, which added to recent uncertainty about the economic outlook.

Early in the day, the Labor Department released a report showing an unexpected uptick in first-time claims for U.S. unemployment benefits in the week ended September 19th.

The report said initial jobless claims inched up to 870,000, an increase of 4,000 from the previous week’s revised level of 866,000.

The modest increase surprised economists, who had expected jobless claims to drop to 843,000 from the 860,000 originally reported for the previous week.

Meanwhile, the Commerce Department released a separate report unexpectedly showing another significant increase in new home sales in the U.S. in the month of August.

The Commerce Department said new home sales jumped by 4.8 percent to an annual rate of 1.011 million in August after skyrocketing by 14.7 percent to an upwardly revised rate of 965,000 in July.

Economists had expected new home sales to pull back by 1.2 percent to a rate of 890,000 from the 901,000 originally reported for the previous month.

With the unexpected increase, new home sales surged up to their highest level since reaching 1.016 million in September of 2006.

Traders largely shrugged off the results of the Treasury Department’s auction of $50 billion worth of seven-year notes, which attracted modestly below average demand.

The seven-year note auction drew a high yield of 0.462 percent and a bid-to-cover ratio of 2.42, while the ten previous seven-year note auctions had an average bid-to-cover ratio of 2.51.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

Trading on Friday may be impacted by reaction to the Commerce Department’s report on durable goods orders in the month of August.


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