Treasuries Move Modestly Lower Following Recent Strength

(RTTNews) - After failing to sustain an initial move to the upside, treasuries moved modestly lower over the course of the trading session on Thursday.

Bond prices pulled back off their early highs and spent time lingering near the unchanged line before dipping into the red. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose 2.1 basis points to 4.377 percent.

With the uptick on the day, the ten-year yield regained ground after ending Wednesday's trading at its lowest closing level in over a month.

The modest pullback by treasuries may have reflected profit taking following the rally seen in yesterday's session, which came as consumer prices rose by less than expected in the month of April.

The data added to recently renewed optimism about the Federal Reserve cutting interest rates in the coming months.

Initially adding to the interest rate optimism, the Labor Department released a report this morning showing a pullback by initial jobless claims in the week ended May 11th.

The Labor Department said initial jobless claims slid to 222,000, a decrease of 10,000 from the previous week's revised level of 232,000.

Economists had expected jobless claims to fall to 220,000 from the 231,000 originally reported for the previous week.

However, the positive sentiment was partly offset by a separate Labor Department report showing U.S. import prices jumped by much more than expected in the month of April.

The report said import prices shot up by 0.9 percent in April after climbing by an upwardly revised 0.6 percent in March.

Economists had expected import prices to rise by 0.3 percent compared to the 0.4 percent increase originally reported for the previous month.

The annual rate of growth by import prices accelerated to 1.1 percent in April from 0.4 percent in March, reflecting the largest over-the-year increase since December 2022.

A separate report released by the Fed showed U.S. industrial production came in flat in the month of April, with a surge in utilities output offset by decreases in mining and manufacturing output.

The Fed said industrial production came in unchanged in April after inching up by a downwardly revised 0.1 percent in March.

Economists had expected industrial production to edge up by 0.1 percent compared to the 0.4 percent increase originally reported for the previous month.

Following the slew of U.S. data released over the past two days, the economic calendar is relatively quiet on Friday, although the Conference Board's report on leading economic indicators in April may still attract some attention.