Treasuries Regain Ground Amid Pullback On Wall Street

(RTTNews) - After trending lower over the past few sessions, treasuries regained some ground over the course of the trading day on Thursday.

Bond prices saw some early volatility but drifted higher as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.9 basis points to 2.238 percent.

The rebound by treasuries came as traders continued to digest yesterday's monetary policy announcement by the Federal Reserve.

The Fed's decision to raise interest rates by a quarter point was widely expected, and the central bank seemed to convince traders any further rate hikes will be gradual.

Fed Chair Janet Yellen stressed that any additional rate hikes going forward would be based on incoming economic data.

With most signs pointing to strength in the labor market, analysts have suggested the focus should be on inflation, which is currently below the Fed's 2 percent target.

Treasuries may have benefited from a sharp pullback by stocks, which came under pressure after rallying in reaction to the Fed decision.

A decrease in commodities prices weighed on Wall Street, with the price of crude oil falling to a nearly seven-year closing low.

On the economic front, the Labor Department released a report this morning showing a bigger than expected pullback in initial jobless claims in the week ended December 12th.

The report said initial jobless claims fell to 271,000, a decrease of 11,000 from the previous week's unrevised level of 282,000. Economists had expected jobless claims to pull back to 275,000.

The Conference Board also released a report showing that its leading economic indicators index rose by 0.4 percent in November, exceeding economist estimates for a 0.2 percent increase.

Meanwhile, a separate report from the Philadelphia Federal Reserve showed an unexpected contraction in regional manufacturing activity in December.

Trading on Friday may be somewhat subdued amid a lack of major U.S. economic data, but traders are likely to keep an eye on remarks by Richmond Fed President Jeffrey Lacker.