Treasuries Extend Upward Move Amid Geopolitical Concerns

(RTTNews) - Treasuries moved notably higher over the course of the trading day on Thursday, adding to the modest gains posted over the past few sessions.

Bond prices moved steadily higher as the day progressed, closing firmly in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5 basis points to 2.424 percent.

With the decrease on the day, the ten-year yield closed lower for the fifth consecutive session, falling to its lowest closing level in a over a year.

Geopolitical concerns contributed to the continued strength among treasuries, as traders focused on the latest developments regarding the conflict in Ukraine.

In response to sanctions from the U.S. and Europe, Russian President Vladimir Putin signed an executive order Wednesday instituting a one-year ban on imports of certain food and agricultural products.

Although Russia has imposed such bans on nations in the past, they have been on the grounds of public health concerns.

It is estimated that Russia's annual imports of fruit and vegetables from the European Union amount to almost 2 billion euros. Russia also buys about 1 billion euros worth of food and agricultural products from the U.S.

In remarks following the European Central Bank's monetary policy decision, ECB President Mario Draghi acknowledged that the dispute with Russia could hurt economic growth.

Meanwhile, traders largely shrugged off a report from the U.S. Labor Department showing an unexpected decrease in initial jobless claims in the week ended August 2nd.

The Labor Department said initial jobless claims fell to 289,000, a decrease of 14,000 from the previous week's revised level of 303,000.

The drop came as a surprise to economists, who had expected jobless claims to edge up to 305,000 from the 302,000 originally reported for the previous week.

Peter Boockvar, chief market analyst at the Lindsey Group, said, "For the Fed, today's data point is another figure pointing out how far behind the reality of the data they are falling."

While developments overseas are likely to remain in focus on Friday, trading could also be impacted by the release of a report on labor productivity and costs.