After seeing an initial move to the upside, treasuries turned lower over the course of the trading session on Thursday.
Bond prices pulled back well off their early highs and into negative territory, ending the day slightly lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by nearly a basis point to 0.731 percent after hitting a low of 0.693 percent.
Treasuries initially benefited from their appeal as a safe haven amid uncertainty about a new stimulus bill and the release of a Labor Department report showing an unexpected increase in first-time claims for U.S. unemployment benefits in the week ended October 10th.
The report said initial jobless claims climbed to 898,000, an increase of 53,000 from the previous week’s revised level of 845,000.
Economists had expected jobless claims to edge down to 825,000 from the 840,000 originally reported for the previous week.
With the unexpected increase, jobless claims reached their highest level since topping 1 million in the week ended August 22nd.
However, treasuries gave back ground after Treasury Secretary Steven Mnuchin told CNBC’s “Squawk Box” that he and President Donald Trump are committed to getting a stimulus deal done.
Mnuchin said he plans to talk to House Speaker Nancy Pelosi today and tell her that he won’t let the issue of testing, a key sticking points in talks, stand in the way.
“We’ll fundamentally agree with their testing language subject to some minor issues,” Mnuchin said. “This issue is being overblown.”
Trading on Friday may be impacted by any developments regarding a new stimulus bill, while reports on retail sales, industrial production and consumer sentiment are also likely to attract some attention.