Treasuries See Modest Strength On Disappointing Economic Data

(RTTNews) - Treasuries moved moderately higher during trading on Thursday following the release of a pair of disappointing economic reports.

After moving modestly higher in early trading, bond prices saw some further upside in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its prices, fell by 2.7 basis points to 2.736 percent.

The strength among treasuries came following the release of a report from the Commerce Department showing an unexpected drop in retail sales in January.

The report said retail sales fell by 0.4 percent in January following a revised 0.1 percent decrease in December. Economists had expected sales to come in unchanged compared to the 0.2 percent increase originally reported for the previous month.

Excluding a steep drop in auto sales, retail sales came in unchanged in January versus a downwardly revised 0.3 percent increase in December. Ex-auto sales had been expected to edge up by 0.1 percent.

While the report showed weaker than expected January sales as well as downward revisions to the data for November and December, most economists cited the impact of poor winter weather.

Paul Dales, Senior U.S. Economist at Capital Economics, "We are not too worried by today's data as our positive outlook for employment suggests households will still have the funds to spend at a healthy rate."

A separate report from the Labor Department showed that initial jobless claims unexpectedly saw a modest increase in the week ended February 8th.

The Labor Department said initial jobless claims rose to 339,000, an increase of 8,000 from the previous week's unrevised figure of 331,000. Economists had expected claims to edge down to 330,000.

Another batch of economic data may be in focus on Friday, with traders likely to keep an eye on reports on import and export prices, industrial production, and consumer sentiment.