MW: Treasurys rise after weak retail-sales and jobless-claims data
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) -- Treasurys rose Thursday, pushing yields lower, after government reports said retail sales were weaker than forecast despite a boost from the cash-for-clunkers program, and initial jobless claims rose, damping hopes for a robust recovery from the recession.
Ten-year-note yields (UST10Y 3.68, 0.00, 0.00%) fell 4 basis points, or 0.04 percentage point, to 3.72%. Bond yields move in the opposite direction as prices.
The Commerce Department said retail sales unexpectedly fell 0.1% in July, compared with the median estimate of economists surveyed by MarketWatch, a 0.8% increase.
Excluding autos, sales fell 0.6% last month, while economists predicted sales would rise 0.1%. See more on retail sales.
A separate Labor Department report said first-time claims for state unemployment benefits ticked up 4,000 to 558,000, after seasonal adjustments, in the week ending Aug. 8. Analysts predicted a small decline. See more on jobless claims.
Continuing claims fell, but many said that may stem from unemployment insurance running out, not from job-seekers getting hired.
"This is a trio of friendlier-than-expected data, and even more so when you exclude the clunker/cash thing from retail sales," said David Ader and Ian Lyngen, government-bond strategists at brokerage CRT Capital Group. "Claims were up more than expected, suggesting the drop in continuing claims is about people falling off the benefit ranks."
Still, gains may be limited before the Treasury sells a record $15 billion in 30-year bonds (UST30Y 4.51, -0.02, -0.53%) later in the session. Bids are due at 1 p.m. Eastern time.
At the past four sales of new long bonds, investors bid an average of $2.10 for every $1 of debt sold, according to RBS Securities, one of the 18 primary dealers required to bid at Treasury auctions.
Indirect bidders, a closely watched class of investors that includes foreign central banks, purchased an average of 30% of the past four sales of new bonds. All those auctions predated a change in the way bids were tallied; that change has significantly increased the proportion taken by the group.
On Wednesday, the government had to offer a higher-than-anticipated yield on its sale of 10-year notes to entice investors, though it did see a strong amount of bids and a high proportion went to indirect bidders.
