FX.co ★ Treasuries Close Roughly Flat After Seeing Early Weakness

Treasuries experienced a decline early in Thursday's session but managed to recover as the trading day progressed. Bond prices rebounded significantly from their initial lows, closing the day approximately unchanged. Consequently, the yield on the benchmark ten-year note, which inversely correlates with its price, remained stable at 4.180 percent, after peaking at 4.225 percent.

The early downturn in treasuries may have been partly attributed to profit-taking following recent bond market strength, which brought ten-year yields to their lowest figures in over a month. However, selling pressures diminished as the session continued. Traders seemed hesitant to make major decisions before the anticipated release of the Labor Department's monthly employment report on Friday.

Current economic forecasts suggest a rise in employment by 200,000 jobs for November, following a modest increase of 12,000 jobs in October. The unemployment rate is expected to edge up to 4.2 percent from 4.1 percent. The upcoming jobs report could influence interest rate predictions leading up to the Federal Reserve's next monetary policy meeting later this month.

Recently, traders have shown greater confidence that the Fed will cut rates by an additional 25 basis points at the December meeting, though uncertainty lingers regarding further rate cuts in subsequent meetings.

"Considering both the October and November job reports, we anticipate continued trend-level job growth, which should permit the Fed to reduce rates by 25 basis points at the December 18 FOMC meeting. However, we expect no rate cuts in January," commented Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.

As the monthly jobs report draws near, the Labor Department released new data this morning indicating a slight rise in first-time U.S. unemployment claims for the week ending November 30th. Initial jobless claims increased to 224,000, showing a rise of 9,000 from the previous week's revised total of 215,000. Economists had anticipated a slight increase in claims to 215,000 from the originally reported 213,000 for the prior week.

With Friday's monthly jobs data expected to be a focal point, traders will also likely track a consumer sentiment report due for release. This report contains consumer inflation expectation readings, which, along with remarks from several Federal Reserve officials, could attract significant attention.