Treasuries Close Moderately Higher After Another Volatile Session

(RTTNews) - Treasuries once again experienced volatility over the course of the trading day on Thursday before ending the session moderately higher.

Bond prices bounced back and forth across the unchanged in morning trading before hovering in positive territory in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.5 basis points to 2.168 percent.

The higher close by treasuries came as traders looked ahead to the release of the Labor Department's closely watched monthly jobs report on Friday.

Economists expect the report to show an increase of about 223,000 jobs in August following the addition of 215,000 jobs in July. The unemployment rate is expected to dip to 5.2 percent from 5.3 percent.

The monthly jobs data could have a significant impact on the outlook for whether the Federal Reserve will raise interest rates at its meeting later this month.

A day ahead of the monthly jobs report, traders were presented with a slew of other U.S. economic data, including a report from the Commerce Department showing a notably narrower trade deficit in the month of July.

Reflecting an increase in exports and a decrease in imports, the report said the trade deficit narrowed to $41.9 billion in July from a revised $45.2 billion in June. The deficit was the smallest since February.

The Institute for Supply Management also released a report showing that the service sector continued to expand at a significant rate in August.

While the non-manufacturing index edged down to 59.0 in August from 60.3 in July, a reading above 50 indicates continued growth in the service sector. Economists had expected the index to dip to 58.5.

Meanwhile, the Labor Department released a report showing a bigger than expected increase in initial jobless claims in the week ended August 29th.

The jobs data is likely to be in focus early on Friday, although trading activity may wane over the course of the session going into the long weekend.