Treasuries Close Modestly Lower Ahead Of Monthly Jobs Report

(RTTNews) - Treasuries moved modestly lower over the course of the trading day on Thursday, pulling back further off their recent highs.

After drifting lower in morning trading, bond prices regained some ground before moving back to the downside going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, crept up by 1.8 basis points to 1.815 percent.

With the increase, the ten-year yield closed higher for the third straight day, continuing to recover from its lowest closing level in well over a year.

The continued weakness among treasuries was partly due to trepidation ahead of the release of the Labor Department's closely watched monthly jobs report on Friday.

Economists expect the report to show an increase of about 230,000 jobs in January, while the unemployment rate is expected to hold at 5.6 percent.

Stronger than expected job growth or an unexpected drop by the unemployment rate may lead to speculation that the Federal Reserve plans to raise interest rates sooner than currently anticipated.

The Labor Department released a report this morning showing smaller than expected rebound in initial jobless claims in the week ended January 31st.

The report said initial jobless claims rose to 278,000, an increase of 11,000 from the previous week's revised level of 267,000. Economists had expected jobless claims to climb to 290,000.

Meanwhile, traders largely seemed to shrug off separate reports on fourth quarter productivity and the December trade deficit.

While the trade deficit widened, Paul Ashworth, Chief U.S. Economist at Capital Economics, said the data was broadly in line with assumptions made by the Bureau of Economic Analysis, likely resulting in no revisions to fourth quarter GDP growth.

The monthly jobs report is likely to be in the spotlight on Friday, although traders may also keep an eye on any developments regarding the Greek debt negotiations.