Treasuries Move To The Downside Following Slew Of Economic Data

After fluctuating early in the session, treasuries moved to the downside over the course of the trading day on Thursday.

Bond prices spent the afternoon lingering in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.7 basis points to 3.459 percent.

The ten-year yield more than offset the slight drop seen in the previous session, ending the day at a three-month closing high.

The weakness among treasuries came as traders digested a substantial batch of U.S. economic data while looking ahead to next week’s Federal Reserve meeting.

The slew of data included a report from the Commerce Department showing an unexpected increase in retail sales in the month of August, although the sales growth followed a revised decrease in July.

The report showed retail sales rose by 0.3 percent in August following a revised 0.4 percent decrease in July. Economists had expected retail sales to come in unchanged, matching the unchanged reading originally reported for the previous month.

Excluding a rebound in auto sales, retail sales fell by 0.3 percent in August following a revised unchanged reading in July.

Ex-auto sales were expected to inch up by 0.1 percent compared to the 0.4 percent increase originally reported for the previous month.

A separate report released by the Labor Department unexpectedly showed another modest decrease in first-time claims for U.S. unemployment benefits in the week ended September 10th.

The Labor Department said initial jobless claims slipped to 213,000, a decrease of 5,000 from the previous week’s revised level of 218,000.

Economists had expected jobless claims to inch up to 226,000 from the 222,000 originally reported for the previous week.

With the unexpected dip, jobless claims fell to their lowest level since hitting 202,000 in the week ended May 28, 2022.

Meanwhile, the Labor Department released a separate report showing a continued decrease in U.S. import prices in August, potentially helping offset recent inflation concerns.

The Labor Department said import prices slid by 1.0 percent in August after tumbling by a revised 1.5 percent in July.

Economists had expected import prices to decrease by 1.2 percent compared to the 1.4 percent slump originally reported for the previous month.

The report also showed export prices dove by 1.6 percent in August after plummeting by a revised 3.7 percent in July.

Export prices were expected to decline by 1.1 percent compared to the 3.3 percent plunge originally reported for the previous month.

However, the Federal Reserve also released a report unexpectedly showing a modest decrease in U.S. industrial production in the month of August.

The report said industrial production edged down by 0.2 percent in August after climbing by a downwardly revised 0.5 percent in July.

Economists had expected industrial production to inch up by 0.2 percent compared to the 0.6 percent increase originally reported for the previous month.

“The latest round of data suggest the Fed can stick to aggressive rate hikes as the labor market remains strong and as the economy slowly softens,” said Edward Moya, senior market analyst at OANDA.

He added, “The risks of the Fed sending the economy into a severe recession are growing but right now the data doesn’t support that argument.”

Following today’s avalanche of data, the economic calendar is relatively quiet on Friday, although a preliminary reading on consumer sentiment in September may attract some attention.

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