2016.09.1515:31:00UTC+00Treasuries Close Modestly Lower Following Slew Of Data

Following the rebound in the previous session, treasuries moved back to the downside over the course of the trading day on Thursday.

Bond prices turned lower in early trading but ended the session well off their worst levels. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.4 basis points to 1.703 percent.

The modestly lower close by treasuries came as traders reacted to the slew of U.S. economic data that was released this morning.

Early in the day, the Commerce Department released a report showing that retail sales fell more than expected in the month of August.

The Commerce Department said retail sales dipped by 0.3 percent in August following a revised 0.1 percent uptick in July. Retail sales had been expected to slip by 0.1 percent.

Excluding a drop in auto sales, the report said retail sales edged down by 0.1 percent in August after falling by 0.4 percent in July. Economists had expected ex-auto sales to rise by 0.3 percent.

A separate report from the Fed showed that industrial production also fell by more than expected in August amid pullbacks in manufacturing and utilities output.

The report said industrial production dropped by 0.4 percent in August after climbing by a revised 0.6 percent in July. Economists had expected production to dip by 0.2 percent.

Steve Murphy and Andrew Hunter, U.S. Economists at Capital Economics, said the weak retail sales and production data suggest third quarter GDP growth may weaker than hoped, which they said is another reason for the Fed to pass on raising interest rates next week.

"Overall, we expect GDP growth will be around 2.5% annualized in the third quarter, although the balance of risks to that forecast probably now lie to the downside," Murphy and Hunter said.

Meanwhile, the Labor Department released a report showing that wholesale prices held steady in the month of August.

The Labor Department said its producer price index for final demand was unchanged in August after falling by 0.4 percent in July. Economists had expected prices to inch up by 0.1 percent.

Excluding food and energy prices, core producer prices ticked up by 0.1 percent in August following a 0.3 percent drop in July. The modest increase in core prices matched economist estimates.

A separate report from the Labor Department showed a slight uptick in initial jobless claims in the week ended September 10th.

Reports on consumer price inflation and consumer sentiment may attract some attention on Friday, although trading activity is likely to be somewhat subdued ahead of next week's Federal Reserve meeting.