Following a largely unchanged and volatile session the previous day, treasuries experienced a modest decline in Thursday’s trading.Bond prices, although recovering slightly from their lowest points after early pressures, still closed in negative territory. Consequently, the yield on the benchmark ten-year note, which inversely correlates to its price, increased by 2.6 basis points to 3.867 percent.The slight weakness observed in treasuries was attributed to optimistic U.S. economic data, notably a report from the Commerce Department indicating that the U.S. economy grew more than previously estimated for the second quarter.The Commerce Department announced that the gross domestic product (GDP) growth rate for the second quarter was revised upward to 3.0 percent from the initially reported 2.8 percent. Economists had anticipated that the GDP growth would remain unchanged.This upward revision signifies a sharper acceleration in GDP growth in the second quarter compared to a 1.4 percent increase in the first quarter.The report also noted slight downward revisions in consumer price growth for the second quarter.”Downward revisions to inflation accompanying an upward revision to spending builds the case for a soft landing,” stated Jeffrey Roach, Chief Economist at LPL Financial. “The key for the remainder of this year will be the job market.”He further commented, “Leading indicators for employment suggest that employment in the services sector is beginning to cool, but the savings from lower mortgage debt servicing will continue to bolster household balance sheets.”In a separate release, the Labor Department reported that first-time claims for U.S. unemployment benefits edged lower for the week ending August 24th.According to the report, initial jobless claims decreased to 231,000, down by 2,000 from the prior week’s revised level of 233,000.Economists had forecasted that jobless claims would remain unchanged from the originally reported 232,000 for the previous week.Treasuries also weakened ahead of the release of critical inflation data on Friday, which could influence expectations regarding the Federal Reserve’s timeline for lowering interest rates.The material has been provided by InstaForex Company – www.instaforex.com
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