Treasures Show Strong Upward Move Following ECB Announcement
Following the pullback seen in the previous session, treasuries showed a notable move back to the upside during trading on Thursday.
Bond prices showed a strong upward move in morning trading but gave back some ground in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.7 basis points to 2.061 percent.
The ten-year yield more than offset the 3.8 basis point increase seen on Wednesday, falling to its lowest closing level in ten months.
The rebound by treasuries came on the heels of the European Central Bank's highly anticipated monetary policy announcement.
The ECB kept all three of its interest rates unchanged and said it expects rates to remain at their current levels for an extended period of time.
The central bank also confirmed that its net asset purchases are intended to run at the current monthly pace of 60 billion euros until the end of December, or beyond, if necessary.
ECB President Mario Draghi's subsequent press conference was seen as dovish, as he said inflation is still expected to move towards the bank's target but warned downside economic risks continue to exist.
Draghi also suggested that decisions about the future of the ECB's massive stimulus would be put off until the next monetary policy meeting in late October.
On the U.S. economic front, the Labor Department released a report showing a sharp increase in first-time claims for unemployment benefits in the week ended September 2nd.
The report said initial jobless claims jumped to 298,000, an increase of 62,000 from the previous week's unrevised level of 236,000. Economists had expected jobless claims to rise to 241,000.
A separate report from the Labor Department showed labor productivity increased by more than initially estimated in the second quarter, while unit labor costs rose by less than initially estimated.
The Labor Department said labor productivity climbed by 1.5 percent in the second quarter compared to the previously reported 0.9 percent increase. Economists had expected the pace of productivity growth to be upwardly revised to 1.3 percent.
Meanwhile, the report said unit labor costs rose by 0.2 percent during the quarter compared to the previously reported 0.6 percent growth. Unit labor costs had been expected to rise by a revised 0.3 percent.
Trading activity on Friday may be somewhat subdued, as reports on wholesale inventories and consumer credit typically do not move the markets.