Treasuries showed a lack of direction throughout the trading session on Thursday before ending the day modestly higher.
Bond prices spent the day bouncing back and forth across the unchanged line and were moving to the upside going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.1 basis points to 2.112 percent.
The choppy trading seen throughout the day came as traders seemed reluctant to make any significant moves ahead of the release of the Labor Department’s closely watched monthly jobs report on Friday.
Economists currently expect the report to show an increase of about 230,000 jobs in February, pushing the unemployment rate down to 5.6 percent.
Tomorrow’s monthly jobs report will be the last released before the Federal Reserve’s monetary policy announcement later this month and could have a significant impact on the central bank’s outlook.
With the focus on the monthly data, traders largely shrugged off a report from the Labor Department showing an unexpected increase in weekly jobless claims.
The Labor Department said initial jobless claims rose to 320,000 in the week ended February 28th from the previous week’s unrevised level of 313,000. The increase came as a surprise to economists, who had expected initial jobless claims to drop to 295,000.
With the unexpected increase, jobless claims rose to their highest level since reaching 327,000 in the week ended May 17, 2014.
Traders also kept an eye on news out Europe, where the European Central Bank provided additional details about its quantitative easing program.
ECB President Mario Draghi revealed that the bank will purchase $66.3 billion worth of bonds each month beginning on March 9th.
The central bank previously indicated that the $1.1 trillion asset purchase program is expected to continue until September of 2016.
Following its monetary policy meeting, the ECB also raised its forecast for European economic growth in 2015 to 1.5 percent from 1 percent.
While the ECB lowered its outlook for inflation in the current year, the QE program is expected to boost inflation going forward.
The monthly jobs report is likely to be in focus on Friday, although traders will also be presented with reports on the U.S. trade deficit and consumer credit.
The material has been provided by InstaForex Company – www.instaforex.com