Treasuries Give Back Ground Amid Strength On Wall Street

(RTTNews) - After trending higher over the past several sessions, treasuries gave back some ground over the course of the trading day on Thursday.

Bond prices moved steadily lower throughout much of the session before closing firmly negative. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.4 basis points to 2.395 percent.

The pullback by treasuries came amid a rally on Wall Street, as the major averages all climbed to new record intraday highs.

Stocks benefited from comments by President Donald Trump, who pledged to announce a plan to lower the tax burden on American business in the next few weeks.

"That's coming along very well. We're way ahead of schedule, I believe," Trump said at a meeting with airline executives. "We're going to announce something I would say over the next two or three weeks that will be phenomenal in terms of tax."

Trump has previously proposed reducing the corporate income tax rate to 15 or 20 percent from the current rate of 35 percent.

Treasuries saw continued weakness following the release of the results of the Treasury Department's auction of $15 billion worth of thirty-year bonds, which attracted slightly below average demand.

The thirty-year bond auction drew a high yield of 3.005 percent and a bid-to-cover ratio of 2.25, while the ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.31.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

Today's thirty-year bond auction came after the Treasury sold $24 billion worth of three-year notes on Tuesday and $23 billion worth of ten-year notes on Wednesday.

On the U.S. economic front, the Labor Department released a report showing an unexpected decrease in initial jobless claims in the week ended February 4th.

The report said initial jobless claims dropped to 234,000, a decrease of 12,000 from the previous week's unrevised level of 246,000. Economists had expected jobless claims to edge up to 250,000.

With the unexpected decrease, jobless claims fell to their lowest level since hitting a more than forty-year low of 233,000 in the week ended November 12th.

A separate report from the Commerce Department showed that wholesale inventories increased in line with estimates in December amid a jump in petroleum inventories.

Following several relatively quiet days on the U.S. economic front, trading on Friday may be impacted by reaction to reports in import and export prices and consumer sentiment.