Treasuries Close Modestly Lower But Off Worst Levels

(RTTNews) - Treasuries ended Thursday's trading modestly lower, extending the pullback seen over the course of the previous session.

Bond prices climbed off their worst levels going into the close but remained in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged up by 1.6 basis points to 2.194 percent.

With the modest increase on the day, the ten-year yield climbed further off the nearly seven-month closing low set on Tuesday.

The continued pullback by treasuries came on the heels of the European Central Bank's latest monetary policy announcement, with the ECB leaving its benchmark interest rate unchanged.

The ECB said interest rates are expected to remain at their present levels for an extended period of time but dropped any reference to a future rate cut.

In his subsequent statement, ECB President Mario Draghi lowered the outlook for euro area inflation, citing lower oil prices.

Traders also kept an eye on developments on Capitol Hill, where former FBI Director James Comey testified before the Senate Intelligence Committee.

The questioning of Comey came after his statement released by the committee on Wednesday appeared to confirm some recent reports about his interactions with Trump.

The statement included details of a conversation during which Trump seemed to ask Comey to drop an investigation of former National Security Adviser Michael Flynn's contact with Russian officials.

"I hope you can see your way clear to letting this go, to letting Flynn go. He is a good guy. I hope you can let this go," Trump said, according to Comey.

Comey told the committee he took the comment from Trump as a directive but said the determination of whether the request amounted to obstruction of justice would be up to Special Counsel Robert Mueller.

However, Trump's personal attorney Marc Kasowitz rejected many of Comey's claims, denying the allegation that the president called for an end of the investigation of Flynn.

The general election in the U.K. also attracted attention, although the outcome will not be known until later in the day.

Meanwhile, the Treasury Department announced the details of next week's auctions of three-year and ten-year notes and thirty-year bonds.

The Treasury said it plans to sell $24 billion worth of three-year notes and $20 billion worth of ten-year notes next Monday and $12 billion worth of thirty-year bonds next Tuesday.

Results of the U.K. election may impact trading on Friday, while traders are likely to shrug off a report on wholesale inventories in the month of April.