After ending the previous session roughly flat, treasuries moved moderately higher over the course of the trading session on Thursday.
Bond prices saw modest strength for much of the session before climbing to new highs going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.4 basis points to 2.860 percent.
Treasuries benefited from renewed trade concerns late in the session after a report from Bloomberg said President Donald Trump intends to move ahead with plans to impose tariffs on $200 billion in Chinese imports as early as next week.
Citing people familiar with the matter, Bloomberg said Trump intends to impose the tariffs after a public comment period ends next Thursday, September 6th.
Bloomberg noted some of the people cautioned that Trump hasn’t made his final decision and may enact the tariffs in installments.
The modest strength seen among treasuries earlier in the session came amid uncertainty about trade talks between the U.S. and Canada ahead of a Friday deadline to reach a deal.
On the U.S. economic front, the Labor Department released a report showing a modest uptick in initial jobless claims in the week ended August 25th.
The report said initial jobless claims crept up to 213,000, an increase of 3,000 from the previous week’s unrevised level of 210,000. Economists had expected jobless claims to edge up to 214,000.
A separate report released by the Commerce Department showed personal income and spending both increased in line with economist estimates in the month of July.
The Commerce Department said personal income rose by 0.3 percent in July after climbing by 0.4 percent in June. The increase in income matched expectations.
The report also said personal spending climbed by 0.4 percent in July, matching the increase in the previous month as well as economist estimates.
Developments regarding trade may impact on the markets on Friday as U.S. and Canadian officials seek to reach an agreement on an overhaul of NAFTA before the end-of-the-week deadline imposed by Trump.
Traders are also likely to keep an eye on U.S. economic reports on Chicago-area business activity and consumer sentiment.