WASHINGTON (dpa-AFX) - After initially showing a notable move to the downside, treasuries recovered over the course of the trading session on Thursday.
Bond prices climbed well off their early lows before ending the day roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, finished the session unchanged at 2.309 percent.
The initial weakness among treasuries came as traders continued to digest the tax reform plan unveiled by Republican lawmakers and President Donald Trump.
The GOP plan includes a reduction in the corporate tax rate to 20 percent from 35 percent, a consolidation in the personal income tax brackets to three from seven, and a sharp increase in the standard deduction.
In remarks touting the plan in Indiana on Wednesday, Trump suggested the tax reform proposal represents a historic opportunity.
'I've been waiting for this for a long time,' Trump said. 'We're going to cut taxes for the middle class, make the tax code simpler and more fair for everyday Americans.'
He added, 'And we are going to bring back the jobs and wealth that have left our country and most people thought left our country for good.'
While Republicans did not provide details about how the cost of the tax cuts would be offset, Trump's top economic advisor Gary Cohn predicted the plan would be paid for by economic growth.
'We think we can drive a lot of business back to America, we can drive jobs back to America, we can make ourselves very competitive,' Cohn told CNBC. 'We think we can pay for the entire tax cut through growth over the cycle.'
On the U.S. economic front, the Commerce Department released a report showing economic activity increased by slightly more than previously estimated in the second quarter.
The report said gross domestic product jumped by 3.1 percent in the second quarter compared to the previously estimated 3.0 percent growth. Economists had expected the pace of GDP growth to be unrevised.
A separate report from the Labor Department showed a rebound in initial jobless claims in the week ended September 23rd.
The report said initial jobless claims rose to 272,000, an increase of 12,000 from the previous week's revised level of 260,000. Economists had expected jobless claims to rise to 270,000.
Meanwhile, the Treasury Department auctioned $28 billion worth of seven-year notes, attracting above average demand.
The seven-year note auction drew a high yield of 2.130 percent and a bid-to-cover ratio of 2.70, while the ten previous seven-year note auctions had an average bid-to-cover ratio of 2.55.
The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
Economic data may impact trading on Friday, with traders likely to keep an eye on reports on personal income and spending, consumer sentiment, and Chicago-area business activity.
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