Treasuries Move Notably Higher Ahead Of Jobs Data

After ending the previous session little changed, treasuries showed a notable move to the upside during trading on Thursday.

Bond prices moved higher in early trading and remained firmly positive throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 7.2 basis points to 2.676 percent.

The advance by treasuries came as traders looked to the relative safety of bonds ahead of the release of the Labor Department’s closely watched monthly jobs report on Friday.

The report is expected to show employment increased by 250,000 jobs in July after jumping by 372,000 jobs in June. The unemployment rate is expected to hold at 3.6 percent.

The strength of the jobs report could impact the outlook for interest rates, although the Federal Reserve will have much more data to digest before their next meeting in September.

A day ahead of the release of the more closely watched monthly jobs report, the Labor Department released a report showing a modest increase in first-time claims for U.S. unemployment benefits in the week ended July 30th.

The report showed initial jobless claims crept up to 260,000, an increase of 6,000 from the previous week’s revised level of 254,000.

Economists had expected jobless claims to inch up to 259,000 from the 256,000 originally reported for the previous week.

The Commerce Department released a separate report this morning showing the U.S. trade deficit narrowed by more than expected in the month of June.

The report showed the trade deficit narrowed to $79.6 billion in June from a revised $84.9 billion in May. Economists had expected the trade deficit to shrink to $81.9 billion from the $85.5 billion originally reported for the previous month.

The decrease in the size of the trade deficit came as the value of exports surged by 1.7 percent to $260.8 billion, while the value of imports edged down by 0.3 percent to $340.4 billion.

The monthly jobs report is likely to be in the spotlight on Friday, as traders use the data to try to gauge how aggressively the Fed will raise interest rates next month.

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