On Thursday, Treasury securities initially showed an upward movement in early trading but eventually retracted over the course of the day.
Bond prices retreated from their morning peaks, maintaining a position near neutral through the afternoon session. The yield on the key ten-year note, which generally moves inversely to its price, edged higher by just under a basis point, reaching 4.575 percent, after hitting a low of 4.517 percent.
At the outset, Treasuries found support from bargain hunters taking advantage of recent declines in the bond market, marked by the ten-year yield climbing to its highest point in seven months.
However, enthusiasm for buying began to diminish early in the session, influenced by a Labor Department report. The report showed an unexpected drop in weekly jobless claims, seemingly endorsing the Federal Reserve's cautious strategy in reducing interest rates.
The report detailed that initial jobless claims decreased to 211,000 for the week ending December 28th, marking a reduction of 9,000 from the previous week's revised figure of 220,000.
This dip caught economists off guard, as they had anticipated a slight increase in jobless claims to 222,000, rather than the reported decrease from the original 219,000 in the prior week.
With this unexpected decline, jobless claims fell to their lowest since they reached 209,000 for the week ending April 27, 2024.
Commenting on the data, Nancy Vanden Houten, Lead US Economist at Oxford Economics, noted, "The claims data align with a robust labor market conducive to the Federal Reserve continuing its rate cuts at a cautious pace in 2025." She further stated, "Our forecast includes three rate cuts this year, though the risk following the mid-December FOMC meeting suggests there may be fewer cuts."
As the market looks ahead, trading activities on Friday may be shaped by responses to a report on the manufacturing sector's performance in the U.S. for December.
The material has been provided by InstaForex Company -
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