US Treasuries are under pressure for a fourth consecutive day, the longest losing streak in five-weeks, after initial claims for jobless benefits in the U.S. unexpectedly fell to a six-week low, spurring appetite for higher-yielding assets.
U.S. 10’s have handedly erased their earlier gains before tomorrow’s non-farm payroll data that is forecasted to show hiring increased last month. NFP is the ‘granddaddy’ for all economic indicators. Thursday’s better than expected weekly initial claims benefits should not dramatically change many individual’s outlook for Friday’s release.
Treasuries dropped after first-time jobless claims unexpectedly fell by -7k to +340k in the week ended March 2 (the lowest reading since the Jan. 19). The four-week average has now managed to drop to a new five-year low.
Consensus is looking for a +160k print confined within the +145k to +225k range forecasted. The unemployment rate is expected to ease a tad to +7.8% from +7.9%, with average hourly wages standing pat at +0.2%.
Not necessarily providing pressure for rates market was the US Trade Deficit growing by +16.5% to -$44.4b from -$38.1b in December that was the smallest in three-years as investors seem to be paying more attention to the claims numbers than the trade numbers. The bias for tomorrow is for a stronger number and any significant upward surprise could push 10-year yields back toward and through +2%.
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