WASHINGTON (dpa-AFX) - Treasuries showed a lack of direction throughout much of the trading session on Thursday before coming under pressure going into the close.
Bond prices moved notably lower late in the session before closing firmly in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, increased by 1.8 basis points to 2.749 percent.
The late-day pullback by treasuries came after a report from the Wall Street Journal said the U.S. is considering lifting tariffs on Chinese goods in an effort to calm markets and give Beijing an incentive to make deeper concessions.
People close to internal deliberations told the Journal that Treasury Secretary Steven Mnuchin proposed the idea of lifting some or all tariffs in a series of strategy meetings.
The people said the aim of easing the tariffs is to advance trade talks and win China's support for longer-term reforms.
The report offset trade concerns raised by an earlier Journal report indicating federal prosecutors are pursuing a criminal investigation of China's Huawei Technologies for allegedly stealing trade secrets from U.S. partners.
Treasuries initially benefited from the trade concerns, although buying interest was offset by a report from the Philadelphia Federal Reserve showing a significant acceleration in the pace of growth in regional manufacturing activity in January.
The Philly Fed said its index for current manufacturing activity in the region jumped to 17.0 in January from 9.1 in December, with a positive reading indicating growth. Economists had expected the index to tick up to 10.0.
A separate report from the Labor Department unexpectedly showed a modest decrease in first-time claims for unemployment benefits in the week ended January 12th.
The report said initial jobless claims edged down to 213,000, a decrease of 3,000 from the previous week's unrevised level of 216,000. Economists had expected jobless claims to inch up to 220,000.
Uncertainty about the impact of the ongoing government shutdown and the outlook for Brexit are also contributing to the choppy trading.
Any further developments regarding trade may impact the markets on Friday along with reports on industrial production and consumer sentiment.
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