TREASURIES-Gloomy data drives U.S. bond prices higher
LONDON, Sept 20 |
LONDON, Sept 20 (Reuters) - Treasury prices rose on Thursday after weak data from the euro zone and Asia painted a gloomy picture of global growth and increased demand for low-risk assets with focus turning to U.S. indicators due later in the day.
* Treasury futures rose 11/32 to 132-23/32, extending gains made in Asian trading after French business activity data showed a sharp slump -- shrinking at its fastest rate since April 2009.
* Chinese Purchasing Managers' Index data released overnight showed activity contracting for the 11th straight month, while Japanese exports fell for a third straight month.
* "We've seen disappointing data in the euro zone, Japan and China, adding to fears of a synchronised global downturn. We've clearly got a risk-off day today and consequently core government bonds have rallied," said Nick Stamenkovic, strategist at RIA Capital Markets in Edinburgh.
* The rally in U.S. debt pushed 10-year yields 4 basis points lower to 1.734 percent, further away from the peak of 1.894 percent seen in the immediate aftermath of the Federal Reserve's announcement of new asset purchase stimulus last week.
* Markets will look for fresh clues on the health of the U.S. economy later in the session with the release of manufacturing and jobs data, neither of which was expected to reverse the trend for strong low-risk assets demand.
* "Initial (jobless) claims are going to be very closely watched and I have the feeling that Treasuries are going to remain well bid going into the data," a trader said.
* The U.S. labour market has been highlighted as a key concern for policymakers and hence markets will be on the lookout for any increase in unemployment claims - an outcome that could spur a fresh rally in T-Notes. Reuters polls forecast a modest fall to 375,000 from 382,000 last week. (Reporting by William James/editing by Chris Pizzey, London MPG Desk, +44 (0)207 542-4441)
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