Treasuries showed a substantial move to the downside during trading on Thursday, more than offsetting the advance seen going into the close of the previous session.
Bond prices climbed off their worst levels in the final hour of trading but remained sharply lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, spiked 14.9 basis points to 3.066 percent.
With the sharp increase on the day, the ten-year yield ended the session at its highest closing level since November of 2018.
The sell-off by treasuries came as trades continued to react to the Federal Reserve’s monetary policy announcement on Wednesday, when the central bank raise interest rates by 50 basis points as expected.
While Fed Chair Jerome Powell said the central bank is not “actively considering” a 75 basis point rate hike, traders still expect rates to rise in the coming months.
Traders were also looking ahead to the release of the Labor Department’s closely watched monthly jobs report on Friday.
Economists currently expect employment to jump by 391,000 jobs in April after surging by 431,000 jobs in March, while the unemployment rate is expected to edge down to 3.5 percent from 3.6 percent.
With the monthly jobs report looming, the Labor Department released a report this morning showing a modest increase in first-time claims for U.S. unemployment benefits in the week ended April 30th.
The report showed initial jobless claims rose to 200,000, an increase of 19,000 from the previous week’s revised level of 181,000.
Economists had expected jobless claims to inch up to 182,000 from the 180,000 originally reported for the previous week.
A separate report from the Labor Department showed a substantial pullback in labor productivity in the first quarter of 2022.
The Labor Department said labor productivity plunged by 7.5 percent in the first quarter, reflecting the largest decline since the third quarter of 1947.
The monthly jobs data is likely to be in the spotlight on Friday, while traders are also likely to keep an eye on comments by several Fed official.
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