Treasuries Close Slightly Lower After Seeing Early Strength

(RTTNews) - After moving moderately higher in early trading on Thursday, treasuries moved back to the downside over the course of the session.

Bond prices climbed off their worst levels going into the close but still ended the day slightly lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.622 percent after hitting a low of 2.564 percent.

While a positive reaction to yesterday's Federal Reserve announcement led to early strength, treasuries turned lower due in part to the release of a batch of upbeat U.S. economic data.

Providing further evidence of a rebound in manufacturing, the Philadelphia Federal Reserve released a report showing that regional manufacturing activity has unexpectedly expanded at a faster rate in June.

The Philly Fed said its diffusion index of current general activity climbed to 17.8 in June from 15.4 in May, with a positive reading indicating growth in regional manufacturing activity.

The increase came as a surprise to economists, who had expected the Philly Fed Index to drop to a reading of 14.0.

A separate report from the Labor Department showed a modest pullback in initial jobless claims in the week ended June 14th.

The report said initial jobless claims dipped to 312,000, a decrease of 6,000 from the previous week's revised level of 318,000. Economists had expected jobless claims to drop to 313,000.

The Conference Board also released a report showing that its index of leading economic indicators rose for the fourth straight month in May.

A negative reaction to the Treasury Department's auction of $7 billion worth of 30-year Treasuries Inflation-Protected Securities also contributed to the pullback.

The 30-year TIPS auction drew a high yield of 1.116 percent, around 3 basis points higher than where the debt traded before the sale.

Following today's slew of data, trading activity may be somewhat subdued on Friday amid a lack of major U.S. economic news.