Treasuries Regain Ground Following Recent Sell-Off

(RTTNews) - After falling sharply over the past several sessions, treasuries regained some ground over the course of the trading day on Thursday.

Bond prices moved to the upside in early trading and remained firmly positive throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5.6 basis points to 2.184 percent.

With the drop on the day, the ten-year yield closed lower for the first time following eight consecutive sessions of gains.

The rebound by treasuries was partly due to bargain hunting following the recent weakness, which drove the yield to its highest levels in two months.

Traders were also looking ahead to the release of the Labor Department's closely watched monthly jobs report on Friday. The report could have a significant impact on the outlook for interest rates.

Economists currently expect the report to show an increase of about 220,000 jobs in April, pushing the unemployment rate down to 5.4 percent.

Yesterday's disappointing private sector jobs data pointed to some downside risk, but Paul Ashworth, Chief U.S. Economist at Capital Economics, said most other labor market indicators suggest Friday's report will show much healthier job growth.

The Labor Department released a separate report this morning showing a slight rebound in initial jobless claims in the week ended May 2nd.

The report said initial jobless claims edged up to 265,000, an increase of 3,000 from the previous week's unrevised level of 262,000. Economists had expected jobless claims to climb to 280,000.

While jobless claims showed a modest increase, they remained close to the fifteen-year low set in the previous week.

The monthly jobs report is likely to be in the spotlight on Friday, overshadowing a separate report on wholesale inventories.