Treasuries Give Back Ground Following Recent Strength

(RTTNews) - After trending higher over the past several sessions, treasuries gave back some ground during trading on Thursday.

Bond prices climbed off their worst levels after initially coming under pressure but remained in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.1 basis points to 2.217 percent.

With the modest increase on the day, the ten-year yield climbed off its worst closing level in well over a month.

The pullback by treasuries came following the release of some upbeat economic data, including a report from payroll processor ADP showing a jump in private sector employment in the month of May.

ADP said private sector employment jumped by 253,000 jobs in May after climbing by a revised 174,000 jobs in April.

Economists had expected an increase of about 185,000 jobs compared to the addition of 177,000 jobs originally reported for the previous month.

The Institute for Supply Management also released a report showing activity in the manufacturing sector unexpectedly grew at a slightly faster rate in the month of May.

The ISM said its purchasing managers index inched up to 54.9 in May from 54.8 in April, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to edge down to 54.5.

Meanwhile, a separate report from the Labor Department showed that first-time claims for U.S. unemployment benefits rose by more than expected in the week ended May 27th.

The report said initial jobless claims climbed to 248,000, an increase of 13,000 from the previous week's revised level of 235,000. Economists had expected jobless claims to edge up to 239,000.

The Commerce Department also released a report showing that construction spending unexpectedly tumbled by 1.4 percent in April.

The Labor Department's monthly jobs report is likely to be in focus on Friday, as the data could have a significant impact on the outlook for interest rates.

Employment is expected to increase by 185,000 jobs in May after jumping by 211,000 jobs in April. The unemployment rate is expected to hold at 4.4 percent.