Fewer-than-expected initial filings push up on U.S. yields
By Sara Sjølin, MarketWatch
NEW YORK (MarketWatch) — Treasury prices fell Thursday after the government said first-time jobless claims last week dropped to the lowest level since mid-April.
Initial filings for unemployment benefits, a key indicator of trends in the labor market, dropped by 22,000 to a total of 405,000 for the week ended July 9, government data showed.
Yields on 10-year notes 10_YEAR +0.21% gained 4 basis points to 2.92% and yields on 2-year notes 2_YEAR -1.05% moved up 1 basis point to 0.37%.
Bond prices move inversely to their yields. A basis point is one one-hundredth of a percentage point.
Later Thursday, the Treasury Department will sell $13 billion in 30-year bonds 30_YEAR +0.02% , yields for which were up 5 basis points to 4.23%.
U.S. government debt is often sought as safe-haven investments and when data, such as jobless claims, indicate a stronger economy, prices fall.
The bond market also kept an eye out for developments in Washington, on the heels of Moody’s Investors Service warning that it may downgrade the U.S. government’s bond rating amid acrimonious talks on raising the debt ceiling. Read more about Moody’s and debt-ceiling negotiations.
In addition, bond traders will have their antennae up as Federal Reserve chief Ben Bernanke sits down for a second day of testimony on Capitol Hill.
On Wednesday, Treasury prices ended on a strong note after a successful auction of benchmark 10-year notes, but prices have been pushed down by relative silence from Europe about debt burdens in several peripheral countries, said David Ader, head of government bond strategy at CRT Capital Group.
“No news about Europe is good news, and that is not what the Treasury market likes,” he said.
Sara Sjølin is a MarketWatch reporter, based in New York.
