WASHINGTON (dpa-AFX) - After ending the previous session modestly higher, treasuries saw some further upside during the trading day on Thursday.
Bond prices moved higher early in the session and remained positive throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 1.8 basis points to 2.946 percent.
The modestly higher close by treasuries came amid uncertainty about the outcome of highly anticipated trade talks between the U.S. and China.
The U.S. delegation led by Treasury Secretary Steven Mnuchin is expected to raise concerns with Chinese Vice Premier Liu He about a number of China's trade practices.
In a post to Twitter, President Donald Trump said, 'Our great financial team is in China trying to negotiate a level playing field on trade!'
'I look forward to being with President Xi in the not too distant future,' he added. 'We will always have a good (great) relationship!'
Ahead of the talks, the Commerce Department released a report showing a significantly narrower U.S. trade deficit in the month of March.
The Commerce Department said the trade deficit narrowed to $49.0 billion in March from a revised $57.7 billion in February. Economists had expected the trade deficit to narrow to $50.0 billion.
The narrower trade deficit came as the value of exports jumped by 2 percent to $208.5 billion, while the value of imports tumbled by 1.8 percent to $257.5 billion.
However, the Commerce Department said the trade deficit with China widened to $35.4 billion in March from $34.7 billion in February, as imports rose by more than exports.
Treasuries may also have benefited from the release of a report from the Institute for Supply Management showing a bigger than expected slowdown in the pace of growth in the service sector in the month of April.
The ISM said its non-manufacturing index fell to 56.8 in April from 58.8 in March. While a reading above 50 still indicates growth in the service sector, economists had expected the index to show a more modest decrease to 58.1.
Traders may also have looked to the safe haven of treasuries ahead of the release of the Labor Department's closely watched monthly jobs report on Friday.
Employment is expected to increase by 192,000 jobs in April after rising by 103,000 jobs in March. The unemployment rate is expected to dip to 4.0 percent from 4.1 percent.
Copyright RTT News/dpa-AFX