Following the sharp pullback seen in the previous session, treasuries saw some further downside during trading on Thursday.
Bond prices regained some ground after an initial decline but remained modestly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.6 basis points to 1.797 percent.
With the modest increase on the day, the ten-year yield climbed further off the one-month closing low set on Tuesday.
The early weakness among treasuries came as traders generally remain optimistic about a potential U.S.-China trade deal.
Chinese Commerce Ministry spokesman Gao Feng told reporters earlier in the day that the U.S. and China remain in close communication but provided few details about the negotiations.
Gao reiterated the Chinese contention that tariffs must be lowered as part of a phase one trade deal, although a new round of U.S. tariffs on Chinese goods is currently set to kick in on December 15th.
However, treasuries climbed off their worst levels as House Speaker Nancy Pelosi, D-Calif., revealed the Democrat-controlled House of Representatives will move forward with drafting articles of impeachment against President Donald Trump.
Pelosi accused Trump of abusing his power for his own benefit by withholding military aid from Ukraine in exchange for an announcement of an investigation into his political rival, former Vice President Joe Biden.
“The President leaves us no choice but to act, because he is trying to corrupt, once again, the election for his own benefit,” Pelosi said at a brief press conference. “The President has engaged in abuse of power undermining our national security and jeopardizing the integrity of our elections.”
She added, “His actions are in defiance of the vision of our Founders and the oath of office that he takes ‘to preserve, protect and defend the Constitution of the United States.'”
The efforts to impeach Trump and remove him from office are likely to stall in the Republican-controlled Senate, although the proceedings still threaten to add to recent uncertainty.
Nonetheless, traders seemed reluctant to make significant moves ahead of the release of the Labor Department’s closely watched monthly jobs report on Friday.
Economists expect employment to increase by 180,000 jobs in November after climbing by 128,000 jobs in October, while the unemployment rate is expected to hold at 3.6 percent.
A day ahead of the release of the monthly jobs report, the Labor Department released a report this morning showing an unexpected decrease in first-time claims for U.S. unemployment benefits in the week ended November 30th.
The report said initial jobless claims slipped to 203,000, a decrease of 10,000 from the previous week’s unrevised level of 213,000. The drop came as a surprise to economists, who had expected jobless claims to inch up to 215,000.
With the unexpected decrease, jobless claims fell to their lowest level since hitting 193,000 in the week ended April 13th.
A separate report from the Commerce Department showed the U.S. trade deficit narrowed in the month of October amid a notable decrease in the value of imports.
The Commerce Department said the trade deficit narrowed to $47.2 billion in October from a revised $51.1 billion in September.
Economists had expected the trade deficit to narrow to $48.7 billion from the $52.5 billion originally reported for the previous month.
The narrower trade deficit came as the value of imports tumbled by 1.7 percent to $254.3 billion, while the value of exports edged down by 0.2 percent to $207.1 billion.
The monthly jobs report is likely to be in the spotlight on Friday, overshadowing separate reports on consumer sentiment, wholesale inventories and consumer credit.