Hot sectors in a tepid recovery
The energy, finance, technology and healthcare industries are expected to be the hottest areas for dealmaking in 2010. Full Article | Full Coverage
TREASURIES-Bonds ease on lower-than-expected jobless claims
*Bonds dip on lower-than-expected jobless claims
*Four-week jobless average painted more mixed picture
*Debt trade lackluster in wait for Bernanke speech
By Chris Reese
NEW YORK, Aug 21 (Reuters) - U.S. Treasuries fell on Thursday after lower-than-expected weekly jobless claims data, although price drops were limited by continuing worries over the health of financial companies and the mortgage market.
The number of U.S. workers filing new claims for jobless benefits fell last week for a second week in a row. But analysts said that, overall, the data painted a bit of a mixed picture on employment, with the four-week moving average of new jobless claims rising to the highest since December 2001. For details, see [ID:nN21363905].
"The jobless claims data is the main cause" for bond price weakness, said Carl Lantz, interest rate strategist at Credit Suisse in New York.
Benchmark 10-year Treasuries US10YT=RR were trading 8/32 lower in price for a yield of 3.84 percent, up from 3.81 percent late on Wednesday. Two-year Treasury notes US2YT=RR were 3/32 lower in price for a yield of 2.32 percent, up from 2.26 percent.
Losses in bonds were limited by safe-haven buying as investors again fretted over the future of mortgage giants Fannie Mae (FNM.N) and Freddie Mac (FRE.N).
The two government-sponsored enterprises' stocks have collapsed this week, with investors wary that the government may have to bail out the two mortgage finance companies, which in turn could exacerbate the housing slump and the credit crisis.
Overall however, analysts said bond trade was relatively lackluster as traders waited for Federal Reserve Chairman Ben Bernanke to speak on financial stability from Jackson Hole, Wyoming, on Friday morning.
But, in an absence of significant top-tier economic data on Thursday, analysts said bond prices remained underpinned by continuing safe-haven buying on fears of more credit losses in the financial sector.
Major investment banks this week have been cutting their outlooks on other investment banks and forecasting more write-downs for Wall Street firms. (Reporting by Chris Reese; Editing by Jonathan Oatis)
