NEW YORK (MarketWatch) — Treasury prices pared back losses Thursday after weekly jobless claims rose, pulling yields down but leaving the benchmark 10-year note on track to close at two-year highs.
Jobless claims showed 13,000 more people applied for unemployment benefits last week, bringing the total to 336,000. Economists polled by MarketWatch had expected a 330,000 reading, but claims nonetheless remained near post-recession lows.
Federal Reserve Enlarge Image
The Federal Open Market Committee could decide to scale back its bond-purchases next month, the market believes.
That puts the labor outlook on track for a strong nonfarm-payrolls report, which many bond-market participants see as a deciding factor in whether the Federal Reserve moves to slow the pace of its $85 billion-per-month bond-buying program, which has held yields lower.
The 10-year note 10_YEAR +0.04% yield was up slightly on the day to 2.897%, on track for its highest close since July 2011. The 5-year note 5_YEAR +0.43% yield rose slightly to 1.651%, while the 30-year bond 30_YEAR -0.59% yield fell 2 basis points to 3.905%.
Meanwhile, Treasury inflation-protected securities, or TIPS, continued to slide ahead of a Thursday auction of $16 billion in 5-year notes. The 5-year yield rose nine basis points to -0.161%, its highest since February 2011, according to Tradeweb.
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That backup in yields may set up the market to bring in demand, though the auction is expected to be average on the whole, according to Stanley Sun, strategist at Nomura Securities.
“The real yield backup and the underperformance of 5-year inflation vs. the wings make this auction attractive for investors to move real risk down the curve,” he wrote in a note.
Treasurys started the day weaker as data in Asia and Europe reinforced views that the global economy is slowly improving. China’s manufacturing rebounded in August, with HSBC’s purchasing-managers index moving to a four-month high after contracting last month. Data showed euro-zone business activity was also at a 26-month high.
Treasurys cut losses as TIPS yields jump
Jobless claims showed 13,000 more people applied for unemployment benefits last week, bringing the total to 336,000. Economists polled by MarketWatch had expected a 330,000 reading, but claims nonetheless remained near post-recession lows.
Federal Reserve Enlarge Image
The Federal Open Market Committee could decide to scale back its bond-purchases next month, the market believes.
That puts the labor outlook on track for a strong nonfarm-payrolls report, which many bond-market participants see as a deciding factor in whether the Federal Reserve moves to slow the pace of its $85 billion-per-month bond-buying program, which has held yields lower.
The 10-year note 10_YEAR +0.04% yield was up slightly on the day to 2.897%, on track for its highest close since July 2011. The 5-year note 5_YEAR +0.43% yield rose slightly to 1.651%, while the 30-year bond 30_YEAR -0.59% yield fell 2 basis points to 3.905%.
Meanwhile, Treasury inflation-protected securities, or TIPS, continued to slide ahead of a Thursday auction of $16 billion in 5-year notes. The 5-year yield rose nine basis points to -0.161%, its highest since February 2011, according to Tradeweb.
Click to Play
Kids steer themselves away from science and technology
Dean Kamen — inventor, innovator and founder of FIRST (For Inspiration and Recognition of Science and Technology) — explains why he thinks science and engineering don't enjoy the same reputation or popularity as some other disciplines and careers.
That backup in yields may set up the market to bring in demand, though the auction is expected to be average on the whole, according to Stanley Sun, strategist at Nomura Securities.
“The real yield backup and the underperformance of 5-year inflation vs. the wings make this auction attractive for investors to move real risk down the curve,” he wrote in a note.
Treasurys started the day weaker as data in Asia and Europe reinforced views that the global economy is slowly improving. China’s manufacturing rebounded in August, with HSBC’s purchasing-managers index moving to a four-month high after contracting last month. Data showed euro-zone business activity was also at a 26-month high.