Treasuries saw significant weakness during trading on Thursday, extending the notable move to the downside seen over the past several sessions.<\/p>\n
Bond prices came under pressure in early trading and remained firmly negative throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 12.9 basis points to 1.518 percent.<\/p>\n
The ten-year yield briefly spiked above 1.6 percent in intraday trading, reaching its highest level in a year. The yield still ended the session at a one-year closing high.<\/p>\n
The sell-off by treasuries came as a batch of largely upbeat U.S. economic data further reduced the appeal of safe havens such as bonds.<\/p>\n
Early in the day, the Labor Department released a report showing a steep drop in first-time claims for U.S. unemployment benefits in the week ended February 20th.<\/p>\n
The Labor Department said initial jobless claims tumbled to 730,000, a decrease of 111,000 from the previous week’s revised level of 841,000.<\/p>\n
Economists had expected jobless claims to drop to 838,000 from the 861,000 originally reported for the previous week.<\/p>\n
With the much bigger than expected decrease, jobless claims fell to their lowest level since hitting 716,000 in the week ended November 28th.<\/p>\n
The Commerce Department also released a report showing new orders for U.S. manufactured durable goods spiked by much more than expected in the month of January.<\/p>\n
The report said durable goods orders soared by 3.4 percent in January after jumping by an upwardly revised 1.2 percent in December.<\/p>\n
Economists had expected durable goods orders to surge up by 1.1 percent compared to the 0.5 percent increase that had been reported for the previous month.<\/p>\n
Excluding a sharp increase in orders for transportation equipment, durable goods orders still jumped by 1.4 percent in January after spiking by an upwardly revised 1.7 percent in December.<\/p>\n
Ex-transportation orders had been expected to climb by 0.7 percent, matching the increase that had been reported for the previous month.<\/p>\n
A separate report released by the Commerce Department showed U.S. gross domestic product jumped by slightly more than originally estimated in the fourth quarter of 2020.<\/p>\n
The Commerce Department said GDP surged up by 4.1 percent in the fourth quarter compared to the previously reported 4.0 percent spike. The upward revision matched economist estimates.<\/p>\n
The intraday spike by yields came just as the Treasury Department revealed this month’s auction of $62 billion worth of seven-year notes attracted well below average demand.<\/p>\n
The seven-year note auction drew a high yield of 1.195 percent and a bid-to-cover ratio of 2.04, while the ten previous seven-year note auctions had an average bid-to-cover ratio of 2.42.<\/p>\n
The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold. <\/p>\n
Earlier this week, the Treasury revealed its auctions of $60 billion worth of two-year notes and $61 billion worth of five-year notes also attracted below average demand.<\/p>\n