The initial pop in Treasuries Thursday morning was met with profit taking. Treasuries pared gains in the afternoon, then rebounded slightly into the close.
The dollar climbed, lessening the chances of central bank intervention in foreign-exchange markets, which leads to purchases of U.S. assets. Japan, which bought heavily this month, is unlikely to buy next month as long as the dollar is higher on yen.
In economic news Thursday, U.S. initial jobless claims rose by 6,000 to 350,000 in the week ending Feb. 21 following the prior week's reading of 344,000. This is slightly above the consensus view. That left the smoothed 4-week moving average rising to 354,750. Meanwhile, U.S. durable goods orders for January were very mixed, with upward revisions to December. Headline orders fell 1.8% (median estimate was for a 1.5% rise), while ex-transport orders were up 2.0% (about as expected). Transport orders fell 10.4%. Non-defense, non-aircraft capital goods orders were up 3.6%, right after a 3.8% rise in December. Shipments were flat, with inventories up 0.1%.
Fed Governor Susan Bies told forecasters she is optimistic hiring will pick up "perhaps substantially." She says economic activity remains solid, and households and businesses are in good financial shape, but she sees underfunded pensions as a problem. Overall, she said, the Fed can be patient before tightening monetary policy because inflation is subdued and fundamentals in place to sustain growth. She also said one can't be sure housing prices are fully justified, but she was confident that local markets and lenders will thwart a bubble.
Traders await Friday's preliminary GDP, University of Michigan Sentiment, and and PMI figures.