Treasuries Close Firmly Negative After Thirty-Year Bond Auction

(RTTNews) - After ending the previous session roughly flat, treasuries moved notably lower over the course of the trading day on Thursday.

Bond prices moved steadily lower for much of the session, ending the day firmly in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, advanced 6.3 basis points to 1.958 percent.

Uncertainty about the outlook for interest rates weighed on treasuries in morning trading following the release of the minutes of the latest Federal Reserve meeting on Wednesday.

The minutes showed that Fed officials were divided about when to begin raising interest rates, with some calling for a rate hike in June even as others suggested waiting until next year.

Additionally, the Labor Department released a report showing a rebound in initial jobless claims in the week ended April 4th, although the less volatile four-week moving average dropped to a nearly fifteen-year low.

The report said initial jobless claims climbed to 281,000 after falling to a two-month low of 267,000 in the previous week. Economists had expected jobless claims to rise to 285,000.

Meanwhile, the Labor Department also said the less volatile four-week moving average edged down to 282,250, a decrease of 3,000 from the previous week's revised average of 285,250.

The modest drop pulled the four-week moving average down to its lowest level since hitting 281,500 in June of 2000.

Treasuries saw further downside following the release of the results of the Treasury Department's auction of $13 billion worth of thirty-year bonds, which attracted weak demand.

The thirty-year bond auction drew a high yield of 2.597 percent and a bid-to-cover ratio of 2.18, while the ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.46.

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

A report on import and export prices may attract some attention on Friday along with speeches by Richmond Fed President Jeffrey Lacker and Minneapolis Fed President Narayana Kocherlakota.