Treasuries Close Notably Lower Amid Upbeat Economic Data

(RTTNews) - Treasuries came under pressure during trading on Thursday, as upbeat economic data added to speculation about the Federal Reserve tapering its asset purchase program.

After spiking higher at the open, bond prices regained some ground but remained firmly negative throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.6 basis points to 2.901 percent.

With the increase on the day, the ten-year yield extended a recent upward trend, reaching its highest closing level in two years.

The weakness among treasuries was partly in reaction to the Labor Department's report on initial jobless claims in the week ended August 17th.

The Labor Department said initial jobless claims rose to 336,000 in the week ended August 17th, an increase of 13,000 from the previous week's revised figure of 323,000.

While claims came in above economist estimates, the less volatile four-week moving average showed another modest decrease and hit its lowest level since November of 2007.

"Bottom line, in the context of the current economic recovery the trend in the pace of firing's continues to improve as measured by the 4 week average," said Peter Boockvar, chief market analyst at the Lindsey Group. "We know though that translating this into a more robust level of hiring's has been more elusive."

He added, "The last payroll report before the September 17th/18th FOMC meeting is on September 6th and while it will be revised multiple times after, may very well be the deciding factor in what comes next from them."

A separate report from the Conference Board showed that its leading economic indicators index rose by slightly more than expected in the month of July, suggesting better economic and job growth in the second half of 2013.

The Conference Board said its leading economic index increased by 0.6 percent in July after coming in unchanged in June. Economists had been expecting the index to increase by about 0.5 percent.

Ataman Ozyildirim, an economist at the Conference Board, said, "Following moderate growth in the last few months, the U.S. LEI picked up in July, with widespread gains among its components."

"The pace of the LEI's growth over the last six months has nearly doubled, pointing to a gradually strengthening expansion through the end of the year," he added.

In other treasury-related news, the Treasury Department announced the details of next week's auctions of two-year, five-year, and seven-year notes.

The Treasury said it plans to sell $34 billion worth of two-year notes next Tuesday, $35 billion worth of five-year notes next Wednesday and $29 billion worth of seven-year notes next Thursday.

Economic data is likely to remain in focus during trading on Friday, as the Commerce Department is scheduled to release its monthly report on new home sales.