2021.10.1419:20:00UTC+00Treasuries Extend Recent Move To The Upside

Treasuries moved higher during trading on Thursday, extending the upward move seen over the two previous sessions.

Bond prices moved to the upside in morning trading and remained firmly positive throughout the afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3 basis points at 1.519 percent.

The ten-year yield continued to give back ground after ending last Friday's trading at its highest closing level in four months.

The continued advance by treasuries came after the Labor Department released a report showing U.S. producer prices increased by slightly less than expected in the month of September.

The Labor Department said its producer price index for final demand rose by 0.5 percent in September after climbing by 0.7 percent in August. Economists had been expecting producer prices to increase by 0.6 percent.

Core producer prices, which exclude prices for food, energy and trade services, inched up by 0.1 percent in September after rising by 0.3 percent in August. Core prices were expected to climb by 0.4 percent.

Compared to the same month a year ago, producer prices surged by a record high 8.6 percent in September compared to an 8.3 percent spike in August.

Meanwhile, the annual rate of growth in core producer prices slowed to 5.9 percent in September from 6.3 percent in August.

"As global energy shortages increase prices heading into the northern hemisphere winter, expect supply chain issues to persist and keep producer price pressures high," said Will Compernolle, Senior Economist at FHN Financial.

He added, "Nevertheless, smaller-than-expected increases in core wholesale prices, even if they cannot be taken for granted as a harbinger of low inflation to come, are nonetheless a welcome alternative to persistent price increases."

Meanwhile, a separate report from the Labor Department showed first-time claims for unemployment benefits dropped below 300,000 for the first time in well over a year in the week ended October 9th.

The report said initial jobless claims fell to 293,000, a decrease of 36,000 from the previous week's revised level of 329,000.

Economists had expected jobless claims to edge down to 319,000 from the 326,000 originally reported for the previous week.

With the bigger than expected decrease, jobless claims dropped to their lowest level since hitting 256,000 in the week ended March 14, 2020.

Trading on Friday may be impacted by reaction to another batch of economic news, including reports on retail sales, import and export prices and consumer sentiment.