Treasuries Close Lower For Third Straight Day Ahead Of Jobs Report

(RTTNews) - After moving lower over the course of the two previous sessions, treasuries saw some further downside during trading on Thursday.

Bond prices came under pressure in early 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 3.5 basis points to 2.702 percent.

With the increase, the ten-year yield closed higher for the third straight day, climbing further off Monday's three-month closing low.

The continued pullback by treasuries came on the heels of the release of a batch of U.S. economic data, including a report from the Labor Department showing a bigger than expected drop in initial jobless claims in the week ended February 1st.

The report said initial jobless claims fell to 331,000, a decrease of 20,000 from the previous week's revised figure of 351,000. Economists had expected jobless claims to drop to 337,000.

Peter Boockvar, managing director at the Lindsey Group, said, "Bottom line, last week seems like an anomaly as the 331,000 print this week is about in line with the average in the first three weeks of January of 328,000."

A separate Labor Department report said labor productivity rose by 3.2 percent in the fourth quarter following a revised 3.6 percent increase in the third quarter. Economists had expected productivity to rise by about 2.6 percent.

At the same time, the report said unit labor costs dropped by 1.6 percent in the fourth quarter after falling by 2.0 percent in the third quarter. Costs had been expected to decrease by 0.7 percent.

Meanwhile, the Commerce Department also released a report showing that the U.S. trade deficit widened by more than expected in the month of December.

The Commerce Department said the trade deficit widened to $38.7 billion in December from a revised $34.6 billion in November. Economists had expected a deficit of $36.0 billion.

The wider than expected trade deficit came as the value of imports edged up by 0.3 percent, while the value of exports dropped by 1.8 percent.

Friday's trading is likely to be driven by reaction to the Labor Department's monthly jobs report. Economists expect an increase of about 180,000 jobs in January, while the unemployment rate is expected to remain at 6.7 percent.