Treasuries Give Back Ground Following Yesterday's Rally

(RTTNews) - After ending the previous session sharply higher following the Federal Reserve's monetary policy statement, treasuries gave back some ground during trading on Thursday.

Bond prices moved to the downside in early trading and remained stuck in the red throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.7 basis points to 1.751 percent.

With the relatively modest increase on the day, the ten-year yield rebounded after ending Wednesday's trading at its lowest closing level in well over a year.

The pullback by treasuries was partly due to bargain hunting following yesterday's rally, which came after the Fed reiterated its pledge to remain patient in beginning to normalize monetary policy.

Upbeat jobs data may also have weighed on treasuries, as the Labor Department released a report showing that initial jobless claims fell to a fourteen-year low in the week ended January 24th.

The report said initial jobless claims tumbled to 265,000, a decrease of 43,000 from the previous week's revised level of 308,000.

While claims fell to their lowest level since April of 2000, the Labor Department said the sharp pullback was partly due to seasonal issues around the Martin Luther King, Jr. Day holiday.

Bond traders were also presented with the results of the Treasury Department's auctions of $35 billion worth of five-year notes and $29 billion worth of seven-year notes.

The five-year note auction attracted below average demand, while demand for the seven-year note auction was average.

Trading on Friday may be impacted by the release of a slew of U.S. economic data, including reports on fourth quarter GDP, consumer sentiment, and Chicago-area business activity.