Treasuries Give Back Ground Following Upbeat Economic Data

(RTTNews) - After trending higher in recent sessions, treasuries gave back some ground during trading on Thursday on the heels of some largely upbeat economic data.

Bond prices moved steadily lower over the course of the session before ending the day firmly in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.3 basis points to 2.534 percent.

The pullback by treasuries came on the heels of the release of some better than expected economic data, including a report from the Labor Department showing a bigger than expected pullback by initial jobless claims in the week ended July 13th.

The report said initial jobless claim fell to 334,000, a decrease of 24,000 from the previous week's revised figure of 358,000. Economists had been expecting jobless claims to dip to 345,000 from the 360,000 originally reported for the previous week.

While the data reflects some seasonal distortions, the report has added to recent optimism about the outlook for the labor market.

A separate report released by the Philadelphia Federal Reserve showed that its index of regional manufacturing activity unexpectedly jumped to a two-year high in July.

The Philly Fed said its diffusion index of current activity surged up to 19.8 in July from 12.5 in June, with a positive reading indicating an increase in regional manufacturing activity. The increase came as a surprise to economists, who had expected the index to drop to a reading of 9.0.

With the unexpected increase, the Philly Fed index reached its highest level since jumping to 36.1 in March of 2011.

Meanwhile, Fed Chairman Ben Bernanke delivered his second day of testimony on Capitol Hill, with the Fed chief appearing before the Senate Banking Committee.

Bernanke's prepared remarks mirrored those he delivered before the House Financial Services Committee on Wednesday, when he attempted to reassure the markets that the Fed will leave interest rates at low levels well after the central bank halts its asset purchase program.

Following the slew of economic data released in recent days, the economic calendar for Friday is relatively quiet, potentially leading to light trading activity.