Bond Report – Treasury's Move Lower

The Bond Market came under pressure after a report said initial claims for jobless benefits fell to the lowest level since July earlier this morning. Naturally the futures were trading higher into the open but still well below yesterday’s levels after the FED sell-off.

Yields on 2-year notes rose 1 basis point, or 0.01%, to 0.97%. Yields move inversely to bond prices. Ten-year-note yields were little changed at 3.42%. Treasury’s edged down after the Labor Department said 530,000 more Americans filed first-time claims for unemployment benefits in the latest week, down 21,000 from the previous week. Continuing claims also declined. See more on jobless claims.

“Claims came in lower than expected, so stronger for the economy,” said strategists at CRT Capital Group. “This is probably a good excuse to put some stress on 7-year notes ahead of the auction.” Traders prefer to see lower prices on a security before an auction, to effectively give them a better deal.

Still to come, at 10 a.m. Eastern time, is a report on existing-home sales. The Treasury Department will sell $29 billion in 7-year notes, with bids due at 1 p.m.