Market to absorb auction of 10-year TIPS
By Ben Eisen, MarketWatch
NEW YORK (MarketWatch) — Treasury prices retreated Thursday after better-than-expected data, paring a rise for much of July that pushed benchmark yields close to their lowest level in 13 months.
The 10-year note 10_YEAR +1.26% yield, which rises as prices fall, was up 3 basis points on the day at 2.494%. The yield closed at 2.464% in the previous session, near its lowest closing level in 13 months, 2.438%, which it reached at the end of May.
Here’s what’s driving the market on Thursday:
Treasurys extended a fall after jobless claims dropped to the lowest level in over eight years. The number of people applying for unemployment benefits last week fell by 19,000 to 284,000, topping Wall Street expectations of a 310,000 reading.
U.S. government debt weakened in overnight trade on the back of strengthening manufacturing numbers. The HSBC Purchasing Managers’ Index for China rose to an 18-month high, while PMI data showed the euro zone was regaining momentum, led by Germany.
Here’s what’s on the calendar Thursday:
Markit flash PMI at 9:45 a.m. Eastern.
New-home sales at 10 a.m. Read the economic preview .
Sale of $15 billion in 10-year Treasury inflation-protected securities at 1 p.m. Strategists at Nomura Securities say: “10-year TIPS still look attractive relative to 5-year and 30-year and should attract foreign interest given the yield pick-up versus overseas linkers.”
The 30-year Treasury bond 30_YEAR +0.70% yield rose 3 basis points on the day to 3.286% while the 5-year note 5_YEAR +2.30% yield rose 3.5 basis points to 1.681%.
