Treasuries Close Modestly Lower Following Choppy Trading Session

(RTTNews) - Treasuries showed a lack of direction throughout much of the trading session on Thursday before eventually ending the day modestly lower.

Bond prices moved to the downside late in the day and remained in negative territory going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.7 basis points to 2.233 percent.

The lower close by treasuries came following the rally in the previous session, which pushed the ten-year yield down to its lowest closing level in almost a month.

Traders were also reacting to a batch of upbeat U.S. economic data, including a report from the Labor Department showing another unexpected drop in initial jobless claims in the week ended May 13th.

The report said initial jobless claims edged down to 232,000, a decrease of 4,000 from the previous week's unrevised level of 236,000. Economists had expected jobless claims to rise to 240,000.

A separate report from the Philadelphia Federal Reserve showed that regional manufacturing activity has unexpectedly expanded at a faster pace in the month of May.

The Philly Fed said its index for current manufacturing activity in the region climbed to 38.8 in May from 22.0 in April, with a positive reading indicating growth. The index had been expected to dip to 19.5.

The Conference Board also released a report showing that its index of leading economic indicators rose by 0.3 percent in April, matching expectations.

In the latest developments in Washington, Deputy Attorney General Rod Rosenstein appointed former FBI Director Robert Mueller to serve as Special Counsel to oversee an investigation of Russian meddling in last year's presidential election.

Rosenstein said public interest requires him to place the investigation under the authority of a person who exercises a degree of independence from the normal chain of command.

The move comes on the heels of reports Trump asked former FBI Director Comey to drop a federal investigation into links between former National Security Adviser Michael Flynn and Russia.

Meanwhile, the Treasury Department announced the details of next week's auctions of two-year, five-year and seven-year notes.

The Treasury said it plans to sell $26 billion worth of two-year notes next Tuesday, $34 billion worth of five-year notes next Wednesday, and $28 billion worth of seven-year notes next Thursday.

Trading activity on Friday may be somewhat subdued amid a quiet day on the economic front, with traders likely to keep an eye on any further developments in Washington.

Remarks by St. Louis Federal Reserve President James Bullard and San Francisco Fed President John Williams are also likely to attract attention.