Treasuries Extend Yesterday's Downward Move

(RTTNews) - After ending the previous session sharply lower, treasuries saw some further downside over the course of the trading day on Thursday.

Bond prices came under pressure in early trading and remained stuck firmly in the red throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, advanced 5.6 basis points to 2.204 percent.

With the increase on the day, the ten-year yield added to yesterday's 7.7 basis point gain, continuing to regain ground after ending Tuesday's trading at its lowest closing level in over a year.

The sustained pullback by treasuries came as traders continued to react to the Federal Reserve's monetary policy announcement.

Traders seem to be focusing on the Fed's statement indicating that it can be patient in beginning to normalize the stance of monetary policy.

In her subsequent press conference, Fed Chair Janet Yellen said that the Fed is unlikely to start the process of normalizing policy for at least the next couple of meetings.

While the comments have contributed to strength among riskier assets like stocks, traders seem to be moving out of safer havens such as U.S. bonds.

The continued weakness among treasuries also came following the release of a report from the Labor Department showing an unexpected drop in initial jobless claims in the week ended December 13th.

The Labor Department said jobless claims slipped to 289,000, a decrease of 6,000 from the previous week's revised level of 295,000.

The drop came as a surprise to economists, who had expected jobless claims to inch up to 295,000 from the 294,000 originally reported for the previous week.

Trading activity on Friday may be somewhat subdued amid a lack of major U.S. economic data, although traders are likely to keep an eye on comments by a pair of Fed officials.