US Treasury Markets
11/5/2009 3:38 PM ET
(RTTNews) -
Treasuries saw modest strength on Thursday, as some traders bought into the safety of government-backed debt ahead of tomorrow's monthly employment report, largely shrugging off today's upbeat productivity and jobs data.
The benchmark ten-year note swung between modest gains and losses over the course of the session before settling in a positive holding pattern in late trading. Subsequently, the yield on the ten-year note, which moves opposite of its price, closed at 3.533 percent, posting a loss of 1.3 basis points on the day.
With the move, the benchmark yield snapped three straight days of gains, but the modest change left the yield near October's two-month closing high.
Friday, all eyes will be on monthly jobs data from the Labor Department detailing the employment situation for the month of October.
Economists expect payrolls to decline by 175,000 compared to September's decline of 263,000, while the unemployment rate is forecast to edge up to 9.9 percent from the 9.8 percent reported in the precious month. The report will be made public at 8:30 a.m. ET.
As bond traders positioned themselves for the forthcoming report, the day's economic data saw little reaction.
This morning, the Labor Department released its report on initial jobless claims for the week ended October 31st, showing that first-time claims for unemployment benefits fell by more than economists had been anticipating.
Jobless claims fell to 512,000 from the previous week's revised figure of 532,000. Economists had been expecting jobless claims to edge down to 522,000 from the 530,000 originally reported for the previous week.
With the bigger than expected decrease, jobless claims fell to their lowest level since claims came in at 488,000 in early January, the last time claims were below 500,000.
A separate report from the Labor Department showed that labor productivity increased by much more than expected in the third quarter, with the report also showing a bigger than expected decrease in labor costs.
The report showed that productivity increased by 9.5 percent in the third quarter following a revised 6.9 percent increase in the second quarter. Economists had expected productivity to rise by 6.5 percent compared to the 6.6 percent growth originally reported for the previous quarter.
Productivity growth in the third quarter marked the fastest pace of growth since the third quarter of 2003, when productivity increased by 9.7 percent.
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