By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices extended gains on Thursday, pushing yields lower, after a government report on jobless claims showed more filings for unemployment benefits in recent months than previously reported.
Analysts also noted support coming from the traditional end-of-the-month positioning by fund managers trying to match changes to their benchmark indexes.
Yields on 10-year notes (UST10Y 3.41, -0.03, -0.87%) , which move inversely to prices, fell 3 basis points to 3.42%. A basis point it 1/100th of a percent.
Yields on 2-year notes (UST2YR 0.77, -0.02, -3.01%) declined 2 basis points to 0.77%.
Thirty-year bond yields (UST30Y 4.48, -0.03, -0.73%) slipped 3 basis points to 4.48%.
The Labor Department’s report showed first-time jobless claims fell to 388,000 in the latest week,. However, this was still a higher level than economists had expected because the prior weeks’ numbers were revised higher. Read story on jobless claims.
The report was disappointing, but it’s unlikely to change investors’ expectations for a relative strong monthly payrolls report coming Friday, said strategists at TD Securities.
Later Thursday, traders will focus on a buyback of U.S. debt by the Federal Reserve as well as more speeches from Fed officials. Read about bonds, recent Fed speakers.
At the end of every month, benchmark bond indexes add any debt that was sold during the period, which usually extended the duration of the index.
Duration, a measure of price sensitivity to a change in interest rates, is partly determined by maturity. Fund managers who try to match their holdings to benchmark indexes buy recently issued debt at month’s end.
“The bullish underpinning of month- and quarter-end helped the market,” said David Ader and Ian Lyngen, bond strategists at CRT Capital Group, in a note to investors.
