MW: Two-year Treasury yields reach March lows as job picture weakens
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) -- Treasury prices gained Thursday, pushing two-year yields to the lowest since March, after U.S. continuing jobless claims rose in the latest week, reaching their highest in 25 years.
Two-year note yields ) fell three basis points, or 0.03%, to 1.32%, the lowest reading for risk aversion since the Bear Stearns collapse sent investors clamoring for the safety of government debt.
First-time claims for unemployment benefits rose 4,000 to 481,000 in the week ended Nov. 1, the Labor Department said. But the number of U.S. residents continuing to collect state unemployment benefits reached the highest level in 25 years, rising by 122,000 to a seasonally adjusted 3.84 million in the week ended Oct. 25. See Economic Report.
"The focus has shifted away from the presidential election to the severity of the economic downturn," said Thomas Di Galoma, head of U.S. government bond trading at Jefferies & Co.
U.S. data on nonfarm payrolls and unemployment, due out early Friday, "should shed some considerable light on the fourth quarter," he noted.
The Labor Department's expected to report that the unemployment rate last month jumped to the highest since June 2003.
Treasurys had declined in earlier trading as U.S. equity futures pointed lower. The Bank of England slashed rates more than forecast, and the European Central Bank reduced its benchmark rate in the hopes of propping up economies across the Atlantic.
