Treasuries Close Modestly Lower, Extending Downward Trend

(RTTNews) - After ending the previous session notably lower, treasuries saw some further downside on Thursday amid the release of some upbeat economic data.

While bond prices saw some volatility as the day progressed, they maintained a negative bias throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.1 basis points to 2.862 percent.

The modest increase on the day extended a recent upward trend by the ten-year yield, which reached its highest closing level in over two months.

Continued concerns about the outlook for the Federal Reserve's asset purchase program weighed on treasuries following the release of upbeat economic data.

Early in the day, the Labor Department released a report showing an unexpected drop in initial jobless claims in the week ended November 30th.

The report said initial jobless claims fell to 298,000, a decrease of 23,000 from the previous week's revised figure of 321,000. The drop surprised economists, who had expected jobless claims to climb to 322,000 from the 316,000 originally reported for the previous week.

With the decrease, jobless claims fell to their lowest level in almost three months, although the data was likely impacted by seasonal adjustments related to the Thanksgiving Day holiday.

A separate report from the Commerce Department showed that U.S. economic activity grew by much more than previously estimated in the third quarter of 2013.

The Commerce Department said U.S. gross domestic product increased by an upwardly revised 3.6 percent in the third quarter compared to the initial estimate of 2.8 percent growth. Economists had expected the pace of GDP growth to be revised to 3.1 percent.

Nonetheless, traders seemed somewhat reluctant to make any significant moves ahead of the release of the closely watched monthly jobs report on Friday.

Economists expect the report to show an increase of about 180,000 jobs in November compared to the addition of 204,000 jobs in October. The unemployment rate is expected to edge down to 7.2 percent.

While the monthly jobs report is likely to be in the spotlight on Friday, reports on personal income and spending and consumer sentiment are also scheduled to be released.