Treasuries Close Modestly Higher Following Another Choppy Session

Treasuries showed a lack of direction over the course of the trading day on Thursday, extending the lackluster performance seen in the previous session.

Bond prices spent much of the day bouncing back and forth across the unchanged line before closing modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down 1.5 basis points to 3.551 percent.

The choppy trading on the day came as traders looked ahead to tomorrow’s report on personal income and spending in the month of February.

The report includes a reading on inflation said to be preferred by the Federal Reserve and could have an impact on the outlook for interest rates.

With the Fed signaling last week that it expects just one more interest rate increase this year, traders will look to the data for clues about the timing of the final rate hike.

CME Group’s FedWatch Tool currently indicates a 48.9 percent chance the Fed will leave rates unchanged at its next meeting in early May and a 51.1 percent chance of a 25 basis point increase.

On the economic front, the Labor Department released a report showing a modest increase in first-time claims for U.S. unemployment benefits in the week ended March 25th.

The report said initial jobless claims rose to 198,000, an increase of 7,000 from the previous week’s unrevised level of 191,000. Economists had expected jobless claims to inch up to 196,000.

A separate report released by the Commerce Department showed the U.S. economy grew by slightly less than previously estimated in the fourth quarter of 2022.

The report said real gross domestic product shot up by 2.6 percent in the fourth quarter compared to the previously reported 2.7 percent jump. Economists had expected the pace of growth to be unrevised.

The Commerce Department said the slower than previously estimated growth reflected downward revisions to exports and consumer spending.

The inflation reading contained in the personal income and spending report is likely to be in the spotlight on Friday, overshadowing separate reports on consumer sentiment and Chicago-area business activity.

Source: Read Full Article