By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices slipped a little further on Thursday, pushing yields up, after a report showed fewer Americans filed for first-time jobless benefits than economists had forecast.
Analysts noted that most bond investors will treat the session as the last of the year, even though the market is open for a half-day on Friday. That will mean a lot of position adjustments and window-dressing of portfolios for the end of the month and year, especially after the wild swings this week, more than any meaningful indication of the how the data fits into investors’ longer-term outlook.
Yields on 10-year notes (UST10Y 3.40, +0.05, +1.40%) , which move inversely to prices, rose as high as 3.42% after the report, then settled back to 3.39%, up 4 basis points on the day. A basis point is one one-hundredth of a percentage point.
Yields on 2-year notes (UST2YR 0.66, +0.02, +3.75%) were little changed at 0.64%.
Thirty-year bond yields (UST30Y 4.46, +0.02, +0.47%) rose 4 basis points to 4.47%.
The number of U.S. workers filing new applications for jobless benefits fell 34,000 to a seasonally adjusted 388,000 in the latest week, the Labor Department said. Analysts noted that season factors are notoriously difficult to gauge around the holidays. Read more on jobless claims.
“Overall, signs of an improving labor market but the year-end volatility of the series undermines its reliability and the market is trading it that way -- selling off only slightly, finding support, and firming back from the lows,” said Ian Lyngen, a bond strategist at CRT Capital Group.
“We’re cautious of month/quarter/year-end index flows as the year comes to an end,” he wrote in emailed comments.
On Wednesday afternoon, bonds rallied strongly after the government’s 7-year note auction (UST7YR 2.80, +0.08, +2.87%) , the last of the year, received very strong demand, especially from foreign investors. Read about bond rally, 7-year auction.
Tuesday was the opposite, which the market selling off after a weak 5-year auction (UST5YR 2.10, +0.06, +2.10%) .
