Treasuries Move Notably Higher Amid Flight To Safety

(RTTNews) - After ending the previous session roughly flat, treasuries showed a strong move to the upside during trading on Thursday.

Bond prices climbed firmly into positive territory in morning trading and saw continued strength for the rest of the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 7.5 basis points to 1.972 percent.

The ten-year yield gave back ground after inching up to its highest closing level since late July of 2019 in the previous session.

Treasuries benefited from their appeal as a safe haven amid renewed geopolitical concerns, as the Biden administration has reverted to describing a Russian invasion of Ukraine as "imminent."

"The evidence on the ground is that Russia is moving toward an imminent invasion. This is a crucial moment," U.S. Ambassador to the United Nations Linda Thomas-Greenfield told reporters this morning.

President Joe Biden also told reporters as was leaving the White House that there is "every indication" that Russia is prepared to attack Ukraine.

Adding to the concerns, the State Department said Russia has expelled the deputy chief of the U.S. diplomatic mission in Moscow.

The latest developments come after Ukraine and pro-Russian separatists traded accusations of attacks in the eastern part of the country.

Russian state-controlled media claimed that Ukrainian forces had shelled territory held by the separatists, while Ukraine has accused Russian-backed rebels of attacking a village in the region.

On the U.S. economic front, the Labor Department released a report showing an unexpected rebound in initial jobless claims in the week ended February 12th.

The Labor Department said initial jobless claims rose to 248,000, an increase of 23,000 from the previous week's revised level of 225,000.

The rebound surprised economists, who had expected jobless claims to edge down to 219,000 from the 223,000 originally reported for the previous week.

The Commerce Department also released a report showing new residential construction in the U.S. pulled back sharply in the month of January.

The report said housing starts tumbled by 4.1 percent to an annual rate of 1.638 million in January after inching up by 0.3 percent to a revised rate of 1.708 million in December.

Economists had expected housing starts to edge down by 0.1 percent to a rate of 1.700 million from the 1.702 million originally reported for the previous month.

Meanwhile, the report said building permits climbed by 0.7 percent to an annual rate of 1.899 million in January after spiking by 9.8 percent to a revised rate of 1.885 million in December.

Building permits, an indicator of future housing demand, had been expected to plunge by 6.0 percent to a rate of 1.760 million from the 1.873 million originally reported for the previous month.

A separate report from the Federal Reserve Bank of Philadelphia showed manufacturing activity in the Philadelphia area expanded at a slower rate in the month of February.

The Philly Fed said its diffusion index for current activity slid to 16.0 in February from 23.2 in January, although a positive reading still indicates growth in regional manufacturing activity. Economists had expected the index to dip to 20.0.

Developments regarding Ukraine are likely to remain in the spotlight on Friday, overshadowing reports on existing home sales and leading economic indicators.