2018.01.1815:21:00UTC+00Treasuries Extend Yesterday's Move To The Downside

Treasuries moved to the downside during trading on Thursday, extending the decline seen over the course of the previous session.

Bond prices moved lower early in the session and remained firmly negative throughout the trading day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed by 3.3 basis points to 2.611 percent.

With the continued increase on the day, the ten-year yield reached its highest closing level in well over three years.

The weakness among treasuries was partly attributed to a report from the Labor Department showing first-time claims for unemployment benefits at a nearly 45-year low in the week ended January 13th.

The report said initial jobless claims fell to 220,000, a decrease of 41,000 from the previous week's unrevised level of 261,000. Economists had expected jobless claims to dip to 250,000.

The bigger than expected decrease pulled jobless claims down to their lowest level since hitting 218,000 in February of 1973.

Meanwhile, a separate report released by the Commerce Department showed a steep drop in new residential construction in the U.S. in the month of December.

The report said housing starts tumbled by 8.2 percent to an annual rate of 1.192 million in December from the revised November estimate of 1.299 million.

Economists had expected housing starts to drop to a rate of 1.275 million from the 1.297 million originally reported for the previous month.

Building permits, an indicator of future housing demand, edged down by 0.1 percent to a rate of 1.302 million in December from a revised 1.303 million in November.

The Federal Reserve Bank of Philadelphia also released a report showing growth in activity in the Philadelphia-area manufacturing sector slowed by more than anticipated in the month of January.

The Philly Fed said its index for current manufacturing activity in the region slid to 22.2 in January from a revised 27.9 in December, although a positive reading still indicates growth.

Economists had expected the Philly Fed index to dip to 25.0 from the 26.2 originally reported for the previous month.

Trading on Friday may be impacted by reaction to the University of Michigan's report on consumer sentiment in the month of January. The consumer sentiment index is expected to rise to 97.0.