Treasuries Turn Higher After Seeing Early Weakness

(RTTNews) - After moving to the downside early in the session, treasuries turned higher over the course of the trading day on Thursday.

Bond prices climbed well off their early lows and managed to end the session modestly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.5 basis points to 1.565 percent.

The rebound by treasuries may have been partly due to a downturn by stocks, which pulled back after trending higher in recent sessions.

The gains posted on Wednesday lifted the Dow and the S&P 500 to new record highs, while the tech-heavy Nasdaq showed an even stronger upward move to reach its best levels of 2016.

Traders were also reacting to the European Central Bank's first monetary policy decision since Britain's vote to leave the European Union.

The ECB left interest rates unchanged, as was widely expected, and said it expects rates to remain at present or lower levels for an extended period of time.

In his subsequent press conference, ECB president Mario Draghi said the central bank will monitor economic and financial market developments very closely due to uncertainties raised by the so-called Brexit.

"Over the coming months, when we have more information, including new staff projections, we will be in a better position to reassess the underlying macroeconomic conditions, the most likely paths of inflation and growth, and the distribution of risks around those paths," Draghi said.

He added, "If warranted to achieve its objective, the Governing Council will act by using all the instruments available within its mandate."

Additionally, traders were presented with a mixed batch of U.S. economic data, including upbeat jobless claims and existing home sales reports but a disappointing reading on Philadelphia-area manufacturing.

Following the slew of data released this morning, the economic calendar for Friday is relatively quiet, potentially leading to reduced trading activity.