Treasurys Extend Losses On Existing Home Sales

NEW YORK (Dow Jones)--Treasurys lost ground on Thursday as a batch of economic releases painted a brighter picture of the U.S. economy.

Demand for safe assets wilted as a bigger-than-forecast decline in jobless claims showed signs of some recovery in the labor market.

A 12.3% increase in existing home sales added to the selling pressure, pushing bond prices to session lows. The leading indicator index was also higher than economist forecast while the gauge of business outlook in the Mid-Atlantic region was basically in line with market consensus.

In recent trading, the benchmark 10-year note was 18/32 lower to yield 3.409%. Bond yields move inversely to their prices.

An extra blow came from rising worries about global inflation, which eats into bonds' fixed returns over time. The fear of higher prices was boosted as producer prices in Germany rose to the highest level since October 2008.

A report overnight showing China's economy expanded at a bigger pace than economists forecast added to angst about inflation, raising speculation that the world's second-largest economy may tighten monetary policy further this year.

News From: online.wsj.com