Treasuries Give Back Ground Ahead Of Monthly Jobs Report

(RTTNews) - After ending the previous session notably higher, treasuries gave back some ground over the course of the trading day on Thursday.

Bond prices came under pressure in morning trading and remained stuck in the red throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.6 basis points to 1.904 percent.

With the increase on the day, the ten-year yield moved back to the upside after ending Wednesday's trading at a nearly two-month closing low.

The pullback by treasuries was partly due to the release of some upbeat economic data, including a report from the Labor Department showing that initial jobless claims unexpectedly fell to a two-month low in the week ended March 28th.

The report said initial jobless claims dropped to 268,000, a decrease of 20,000 from the previous week's revised level of 288,000.

The drop surprised economists, who had expected jobless claims to edge up to 285,000 from the 282,000 originally reported for the previous week.

With the unexpected decrease, jobless claims fell to their lowest level since hitting 267,000 in the week ended January 24th.

Since traders will be unable to immediately react to tomorrow's monthly jobs report due to the Good Friday holiday, the weekly claims data may have been taken as a sign that the monthly report will be strong.

Economists expect employment to increase by about 247,000 jobs in March after jumping by 295,000 jobs in February, while the unemployment rate is expected to hold at a six-year low of 5.5 percent.

Meanwhile, the Commerce Department released a report showing that the U.S. trade deficit narrowed by much more than anticipated in the month of February.

The report said the trade deficit narrowed to $35.4 billion in February from a revised $42.7 billion in January. Economist had expected the deficit to narrow slightly to $41.5 billion.

The much narrower than expected trade deficit reflected another substantial drop in the value of imports and could lead analysts to raise their forecasts for first quarter GDP growth.

A separate report released by the Commerce Department showed that factory orders unexpectedly edged up by 0.2 percent in February.

Following the long holiday weekend, traders will finally have a chance to react to the closely watched monthly jobs report next week.

The actual economic calendar for the week is relatively light, however, although traders are likely to keep an eye on service sector activity data and the minutes of the most recent Federal Reserve meeting.