Treasuries Give Back Ground Following Recent Strength

Markets

After moving sharply higher over the past few sessions, treasuries gave back some ground during trading on Thursday.

Bond prices fluctuated in morning trading but remained firmly negative throughout the afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.9 basis points to 1.568 percent.

The pullback by treasuries came following the release of a Labor Department report showing initial jobless claims decreased for the fourth straight week in the week ended October 23rd.

The report said initial jobless claims dipped to 281,000, a decrease of 10,000 from the previous week’s revised level 291,000. Economists had expected jobless claims to come in unchanged compared to the 290,000 originally reported for the previous week.

With the modest decrease, jobless claims once again fell to their lowest level since hitting 256,000 in the week ended March 14, 2020.

Meanwhile, traders largely shrugged off a report from the Commerce Department showing a dramatic slowdown in the pace of U.S. economic growth in the third quarter, potentially viewing the data as old news.

The Commerce Department said real gross domestic product increased by 2.0 percent in the third quarter after jumping by 6.7 percent in the second quarter. Economists had expected the pace of GDP growth to slow to 2.7 percent.

The bigger than expected slowdown in GDP growth came as consumer spending rose by 1.6 percent in the third quarter after spiking by 12.0 percent in the second quarter.

Despite the weaker GDP growth in the third quarter, Bernd Weidensteiner, Senior Economist at Commerzbank, predicted the Federal Reserve would not be dissuaded from deciding to tapering its bond purchases at its meeting next week.

A report on personal income and spending may attract attention on Friday, although trading activity may be somewhat subdued ahead of next week’s Fed meeting.

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