Treasuries Finish Choppy Trading Session Slightly Lower

(RTTNews) - Treasuries showed a lack of direction over the course of the trading session on Thursday before eventually closing slightly lower.

Bond prices gave back ground after seeing initial strength but climbed off their worst levels as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.0 basis point to 3.791 percent.

The early pullback by treasuries came after the Labor Department released a report showing first-time claims for U.S. unemployment benefits unexpectedly edged lower in the week ended September 21st.

The Labor Department said initial jobless claims slipped to 218,000, a decrease of 4,000 from the previous week's revised level of 222,000.

The dip surprised economists, who had expected jobless claims to rise to 225,000 from the 219,000 originally reported for the previous week.

With the unexpected decrease, jobless claims fell to their lowest level since hitting 216,000 in the week ended May 18th.

However, treasuries regained some ground in afternoon trading as the Treasury Department revealed this month's auction of $44 billion worth of seven-year notes attracted above average demand.

The seven-year note auction drew a high yield of 3.668 percent and a bid-to-cover ratio of 2.63, while the ten previous seven-year note auctions had an average bid-to-cover ratio of 2.53.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

Trading on Friday may be impacted by reaction to a Commerce Department report on personal income and spending, which includes the Federal Reserve's preferred inflation gauge.