Treasuries Show Significant Move Back The Upside

(RTTNews) - Treasuries showed a significant move to the upside during trading on Thursday, offsetting the pullback seen over the two previous sessions.

Bond prices moved steadily higher throughout morning trading before moving roughly sideways in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled by 8 basis points to 0.631 percent.

The rally by treasuries came after a report from the Labor Department showed first-time claims for unemployment benefits continued to decline in the week ended May 2nd but still came in above economist estimates.

The report said initial jobless claims dropped to 3.169 million, a decrease of 677,000 from the previous week's revised level of 3.846 million.

Jobless claims have declined steadily since hitting a record high of 6.867 million in the week ended March 28th, although the total number of new claims since the coronavirus-induced shutdown has now reached 33.5 million.

"As more states start the re-opening process over the coming weeks we are likely to see steeper declines in initial claims, but the numbers are likely to remain horrible and well in excess of anything seen during the Global Financial Crisis," said ING Chief International Economist James Knightley.

He added, "This report tells us nothing about hiring though, which is likely to remain weak for some time to come given the economically depressing effects of social distancing, consumer caution relating to Covid-19 fears, travel restrictions and the legacy of tens of millions of people being out of work."

On Friday, the Labor Department is scheduled to release its more closely watched report on the employment situation in the month of April.

Employment is expected to plunge by approximately 22 million jobs in April, driving the unemployment rate up to 14.0 percent.