Treasuries Pull Back Off Best Levels But Remain Firmly Positive

(RTTNews) - After moving sharply higher last year, treasuries showed a notable move to the upside early in the first trading session of 2020.

Bond prices gave back some ground as the day progressed but still closed firmly in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.7 basis points to 1.882 percent.

The early strength among treasuries came as some traders looked to move money into the relative safety of bonds to kick off the new year.

Investors generally remain optimistic, as evidenced by the new record highs on Wall Street, although some uncertainty continues to linger.

The U.S. and China plan to sign their phase one trade agreement later this month, but the details of the deal remain under wraps.

Additionally, significant tariffs will remain in place even after the deal is signed, suggesting the ongoing U.S.-China trade dispute could continue to hamper the global economy.

While the U.S. economy has held up relatively well despite the trade war, it also remains to be seen if the strong performance will continue.

On the U.S. economic front, the Labor Department released a report showing first-time claims for unemployment benefits unexpectedly edged slightly lower from an upwardly revised level in the week ended December 28th.

The report said initial jobless claims slipped to 222,000, a decrease of 2,000 from the previous week's revised level of 224,000.

Economists had expected jobless claims to inch up to 225,000 from the 222,000 originally reported for the previous week.

Meanwhile, the Labor Department said the less volatile four-week moving average crept up to 233,250, an increase of 4,750 from the previous week's revised average of 228,500.

With the uptick, the four-week moving average reached its highest level since hitting 235,750 in the week ended January 27, 2018.

Trading on Friday may be impacted by reaction to reports on manufacturing activity and construction spending as well as the minutes of the latest Federal Reserve meeting.