Treasuries Move To The Upside Amid Renewed Sell-Off On Wall Street

After closing roughly flat for two straight sessions, treasuries moved to the upside over the course of the trading day on Thursday.

Bond prices fluctuated in morning trading before climbing more firmly into positive territory in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 5.1 basis points to 3.925 percent.

Treasuries may have benefited from their appeal as a safe haven, as stocks on Wall Street moved sharply lower, dragging the Dow down to its lowest levels in four months.

The advance by treasuries also came following the release of a report from the Labor Department showing initial jobless claims rose by more than expected in the week ended March 4th.

The report said initial jobless claims climbed to 211,000, an increase of 21,000 from the previous week’s unrevised level of 190,000. Economists had expected jobless claims to inch up to 195,000.

With the bigger than expected increase, jobless claims reached their highest level since hitting 223,000 in the week ended December 24th.

The data helped ease concerns about labor market tightness, which the Federal Reserve has pointed to as a reason for stubbornly elevated inflation.

Meanwhile, traders continued to look ahead to the release of the Labor Department’s more closely watched monthly jobs report on Friday.

Economists currently expect employment to jump by 203,000 jobs in February after surging by 517,000 jobs in January, while the unemployment rate is expected to hold at 3.4 percent.

“Fed Chair Powell seems to have signaled they will accelerate the tightening pace to a half-point rate rise if we get both a hot NFP and inflation reports,” said Edward Moya, senior market analyst at OANDA.

He added, “Some traders are thinking that if tomorrow delivers a not-so-hot jobs report, that we could see Fed fund futures lean towards a quarter-point rate rise for the March 22nd FOMC meeting.”

Trading on Friday is likely to be driven by reaction to the monthly jobs report, which could significantly impact the outlook for interest rates.

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