NEW YORK: US Treasury debt prices traded higher on Thursday as oil and stocks stabilized and as investors focused on February's employment report due on Friday for further signs of economic momentum.
Brent crude prices, which are up about 35 percent from last month's lows, were steady on the day, indicating to some investors that recent market volatility may have calmed. Bond prices have largely moved inversely to oil this year as falling oil prices have increased concerns about slowing global growth.
"The oil move versus the intraday move in Treasuries looks very correlated," said Subadra Rajappa, head of US rates strategy at SG Corporate & Investment Banking in New York. "People also don't want to take big positions ahead of tomorrow's number."
Limiting rising Treasury prices were concerns surrounding Friday's employment report, which is expected to show employers added 190,000 jobs in February, according to economists polled by Reuters.
"Markets are a little bit nervous about tomorrow's payroll number," said John Herrmann, director of US rates strategy at MUFG in New York. "The market is too pessimistic. The number could be really good and if it is people will realize the Fed may raise (rates) over the summer."
Earlier, data showed initial claims for state jobless benefits increased 6,000 to a seasonally adjusted 278,000 for the week ended Feb. 27, above the 271,000 economists forecast. However, the underlying trend continued to point to a strengthening labor market.
Resilience in the labor market was supported by a report on Thursday showing announced layoffs by US companies tumbled 18 percent in February.
"The labor market has been holding up well and has been one of the stronger points in the last few months as other points have weakened," said Matthias Rusinski, US rates strategist at UBS in New York.
A combination of strengthening data, rising inflation and calming financial markets could drive the Federal Reserve to raise interest rates this year, analysts said.
"With the more positive data we've gotten including core PCE, they could lift off sooner than the market thinks," said Kevin Giddis, head of fixed-income capital markets at Raymond James in Memphis, Tennessee.
Benchmark 10-year Treasury notes were last up 6/32 in price to yield 1.826 percent, down from 1.848 percent on Wednesday.
The 30-year bond was last up 24/32 in price to yield 2.654 percent, down from 2.692 percent on Wednesday.
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