Treasuries Come Under Pressure Amid Pullback In Jobless Claims
Treasuries came under pressure during trading on Wednesday, more than offsetting the modest strength seen in the previous session.
Bond prices climbed off their worst levels after an early move to the downside but remained firmly negative. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.7 basis points to 0.955 percent.
The early weakness among treasuries came following the release of some upbeat economic data, including a report from the Labor Department showing a significant pullback in first-time claims for unemployment benefits in the week ended December 19th.
The report said initial jobless claims slid to 803,000, a decrease of 89,000 from the previous week’s revised level of 892,000.
Economists had expected jobless claims to come in unchanged compared to the 885,000 originally reported for the previous week.
The unexpected pullback came after jobless claims reached their highest level since early September in the previous week.
The Commerce Department also released a report showing new orders for U.S. manufactured durable goods increased by more than expected in the month of November.
Selling pressure waned over the course of the morning, however, as separate reports from the Commerce Department showed steep drops in personal income and new home sales.
Uncertainty about a coronavirus relief package approved by Congress has also led to cautious trading after President Donald Trump slammed the bill as a “disgrace” in a video posted on Twitter on Tuesday.
Trump called on Congress to amend the bill to increase the direct payments to individuals to $2,000 from $600 and “get rid of the wasteful and unnecessary items.”
Democrats expressed support for increasing the size of the direct payments, but the idea is likely to face resistance in the Republican-controlled Senate.
The stimulus is attached to a government spending bill that Trump needs to sign by Monday to avoid a government shutdown.
Trading activity is likely to be light in a shortened trading session on Thursday, as some traders look to get a head start on the holiday weekend.