TREASURIES-Treasuries fall as jobless data better than expected

Thu Mar 7, 2013 9:18am EST

Related Topics

* ECB stays put on rates, avoids dramatic action
    * Bank of England holds back on more stimulus
    * U.S. jobless claims unexpectedly fall

    By Luciana Lopez
    NEW YORK, March 7 (Reuters) - Prices for U.S. Treasuries
slid on Thursday as a second straight day of
better-than-expected labor market data boosted hopes the world's
largest economy was building momentum.
    The number of Americans filing initial claims for
unemployment benefits unexpectedly fell to a seasonally adjusted
340,000 last week, suggesting a pick-up in the labor market
recovery. 
    "What's likely to drive the market today is definitely the
initial claims," said Andrew Wilkinson, chief economic
strategist at Miller Tabak & Co. Llc in New York. 
    "It's certainly welcoming to the market and it's once again
supporting the thought that the economic recovery is
strengthening despite the stalemate in budget talks, etc," he
added.
    Benchmark 10-year Treasury notes slid 8/32 in
price to yield 1.967 percent, from 1.9427 percent on Wednesday. 
    Prices for 30-year bonds fell 15/32 to yield
3.178 percent, from 3.1557 percent late Wednesday.  
    
    The jobless claims data came a day after a report by a
payrolls processor showed a larger-than-expected 198,000 jobs
added by U.S. private employers in February. 
    The combination of Wednesday's and Thursday's data could
raise hopes for the Labor Department's monthly nonfarm payrolls
figures on Friday.
    That report is particularly important because the Fed wants
to see an unemployment rate around 6.5 percent - still a good
way from the current 7.9 percent. Analysts in a Reuters poll,
however, see the jobless rate unchanged last month.
    The Fed's support has helped fuel global appetite for
riskier assets, with the bank buying $85 billion per month of
mortgage-backed securities and Treasuries through the year.
    Other central banks on Thursday proved cautious about
changing their policy stance.
    The European Central Bank kept interest rates steady on
Thursday and avoided dramatic action to help Italy or other euro
zone countries, despite the threat of political turmoil in Rome
reigniting the bloc's debt crisis. 
    ECB chief Mario Draghi said price risks were "broadly
balanced" and noted risks of weaker growth. 
    Those comments helped offset the selling of Treasuries, said
Ian Lyngen, a senior government bond strategist with CRT Capital
Group Llc in Stamford, Connecticut.
    In addition, the Bank of England decided not to restart its
main stimulus program for Britain's ailing economy as the
government stuck to its deficit-cutting pledge and said the BoE
should support growth.
FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.