Treasuries Close Roughly Flat Following Lackluster Session

(RTTNews) - Treasuries turned in a lackluster performance during trading on Thursday before eventually ending the session roughly flat.

Bond prices moved modestly higher after seeing early volatility but pulled back going into the close. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 1.766 percent.

The early volatility came as traders digested a slew of U.S. economic data, including a report from the Commerce Department showing a steep drop in orders for transportation equipment contributed to a bigger than expected decrease in durable goods orders in September.

The Commerce Department said durable goods orders tumbled by 1.1 percent in September after rising by a revised 0.3 percent in August.

Economists had expected durable goods orders to decline by 0.8 percent compared to the 0.2 percent uptick that had been reported for the previous month.

Excluding the nosedive in orders for transportation equipment, durable goods orders dipped by 0.3 percent in September after climbing by 0.3 percent in August. Ex-transportation orders had expected to edge down by 0.2 percent.

A separate report from the Commerce Department showed new home sales pulled back in September after a sharp increase in the previous month.

The report said new home sales slid by 0.7 percent to an annual rate of 701,000 in September after spiking by 6.2 percent to a revised rate of 706,000 in August.

Economists had expected slump by 1.7 percent to a rate of 701,000 from the 713,000 originally reported for the previous month.

Meanwhile, the Labor Department released a report showing a modest decrease in first-time claims for U.S. unemployment benefits in the week ended October 19th.

The report said initial jobless claims dipped to 212,000, a decrease of 6,000 from the previous week's revised level of 218,000.

Economists had expected jobless claims to inch up to 215,000 from the 214,000 originally reported for the previous week.

Traders once again largely shrugged off the results of the Treasury Department's long-term securities auction, with the sale of $32 billion worth of seven-year notes attracting roughly average demand.

The seven-year note auction drew a high yield of 1.657 percent and a bid-to-cover ratio of 2.46, while the ten previous seven-year note auctions had an average bid-to-cover ratio of 2.43.

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

Earlier this week, the Treasury revealed its auctions of $40 billion worth of two-year notes and $41 billion worth of five-year notes also attracted above average demand.

A revised reading on U.S. consumer sentiment in October may attract some attention on Friday, although the University of Michigan's consumer sentiment index is expected to be unrevised at 96.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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