Treasuries retreat sharply after flurry of economic data

After rising sharply in the previous two sessions, Treasuries showed a substantial bearish comeback in Thursday’s session.

Bond prices fell steadily for much of the trading day before closing firmly in negative. As a result, the yield on the benchmark 10-year note, which moves opposite to its price, jumped 14.1 basis points to 2.828%.

The ten-year yield more than offset the 9.3 basis point decline seen in the previous two sessions, reaching its highest closing level since December 2018.

The sharp pullback in Treasuries came on the heels of a flurry of US economic data, including a report from the Commerce Department showing that US retail sales rose in March amid increase in service station sales.

The report showed retail sales rose 0.5% in March after rising an upwardly revised 0.8% in February.

Economists had expected retail sales to rise 0.6% from the 0.3% rise originally reported for the previous month.

Excluding a decline in sales by motor vehicle and parts dealers, retail sales jumped 1.1% in March after rising 0.6% in February. Non-automotive sales are expected to increase by 1.0%.

A separate report released by the Labor Department showed that initial jobless claims in the United States rose more than expected in the week ended April 9.

The Labor Department said initial jobless claims rose to 185,000, up 18,000 from the previous week’s revised level of 167,000.

Economists had expected initial jobless claims to hit 171,000 from the 166,000 initially reported the previous week.

The Labor Department also released a report showing U.S. import prices rose more than expected in March as fuel import prices continued to soar.

Meanwhile, preliminary data released by the University of Michigan unexpectedly showed a substantial improvement in US consumer sentiment in April.

The report showed that the consumer sentiment index rose to 65.7 in April from 59.4 in March. The sharp increase surprised economists, who expected the index to fall to 59.0.

The consumer sentiment index rebounded from its lowest level since August 2011 amid improving consumer expectations, with the expectations index rising from 54.3 at Mach to 64.1 in April.

While the markets will be closed on Friday, the Federal Reserve is still due to release its industrial production report for March.

After the long weekend, traders should keep an eye on reports on homebuilder confidence, housing starts and existing home sales as well as the Fed’s beige book.

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