Treasurys slip on upbeat jobs data
U.S. government bond prices fell Thursday, sending yields to one-week highs, as signs of improvement in the dismal job market encouraged profit taking from recent rallies.
Claims for jobless benefits showed an unexpected fall last week, suggesting the economy’s weakest link might be strengthening as the recovery from the worst recession in decades continues.
Some of that economic optimism dissipated after a separate report showed the service sector unexpectedly fell into contractionary territory last month.
However, the tone remained decidedly negative with the government expected to announce at 11 a.m. more than $70 billion worth of Treasurys auctions for next week, which usually leads dealers to cheapen up the market before absorbing such large volumes of supply.
"Treasurys are lower ahead of the supply announcement. I think it’s a lot of cross currents today," said Kim Rupert, managing director of global fixed income analysis at Action Economics LLC in San Francisco no fax payday loans.
"We saw the jobless claims fall again, so that’s good news. But then we saw the ISM services index, which was bad news for the economy. There’s a ton of different stuff but still yields are higher."
Though the jobless claims report hit Treasurys prices across the board at first, its lasting effect was on the longer maturities.
Two-year notes recovered from earlier losses and were last unchanged, yielding 0.73%.
During the sell-off, two-year yields rose as far as 0.79%, their highest since November 24.
Benchmark 10-year yields rose as far as 3.40%, their highest since November 23.
They were last down 15/32, yielding 3.37%.
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