Treasuries Finish Choppy Trading Day Modestly Higher

Treasuries fluctuated over the course of the trading session on Thursday before ending the day modestly higher.

Bond prices spent the morning bouncing back and forth across the unchanged line before moving to the upside in afternoon trading.

Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.2 basis points to 1.529 percent.

With the modest decrease on the day, the ten-year yield gave back ground after ending the previous session at its highest closing level in over three months.

The uptick by treasuries came following the notable move downside move seen over the past several sessions, which reflected concerns about inflation and the Federal Reserve scaling back its asset purchases.

Traders also kept an eye on Washington as the Senate voted 65 to 35 to approve a stopgap spending bill to avoid a government shutdown.

The legislation, which funds the government through December 3rd, also includes spending on hurricane relief and Afghan refugee resettlement.

The spending bill still needs to pass the House before a midnight deadline, with the Democrat-controlled chamber expected to approve the legislation.

Even if a government shutdown is avoided, the U.S. still faces a potential default amid an impasse over raising the debt ceiling.

Treasury Secretary Janet Yellen has warned of “catastrophic economic consequences” if the debt ceiling is not raised by October 18th.

Yellen and Federal Reserve Chair Jerome Powell also testified before the House Financial Services Committee today.

Powell’s prepared remarks mirrored those he delivered before the Senate Banking Committee on Tuesday, with the Fed chief warning of upside risks to inflation.

On the economic front, a report from the Labor Department showed initial jobless claims unexpectedly increased for the third straight week in the week ended September 25th.

The report said initial jobless claims edged up to 362,000, an increase of 11,000 from the previous week’s unrevised level of 351,000. The uptick surprised economists, who had expected jobless claims to dip to 335,000.

With the unexpected increase, jobless claims climbed further off the pandemic-era low of 312,000 set in the week ended September 4th.

Meanwhile, a separate report from the Commerce Department showed economic growth in the U.S. accelerated by slightly more than previously estimated in the second quarter.

The Commerce Department said real gross domestic product shot up by 6.7 percent in the second quarter compared to the previously reported 6.6 percent spike. Economists had expected the jump in GDP to be unrevised.

A batch of U.S. economic data may attract attention on Friday, with traders likely to keep an eye on reports on personal income and spending, manufacturing activity, construction spending and consumer sentiment.

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