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Prospects Daily: Initial jobless claims in U.S. inched down last week

Global Macroeconomics Team's picture

Important developments today:

1. U.S. treasuries gain as global stocks’ rally fades

2. Initial jobless claims in U.S. inched down last week


U.S. treasuries gain as global stocks’ rally fades. Treasury prices moved higher on Thursday morning, snapping six straight days of decline, as weak Chinese export growth and a renewed sense of concerns about euro-zone financial stability halted a rally in global equities and lured some investors back in to safe-haven U.S. government debt. China’s export grew at the weakest in seven months, adding to worries that global economic growth is slowing down. Meanwhile, Europe’s recapitalization plan for the region’s private banks failed to completely entice investors’ interest. Treasuries extended gains slightly after the U.S data showed weekly jobless claims remain elevated. Benchmark 10-year note yields declined 2 basis points (bps) to 2.19%, after reaching a six-week high of 2.27% yesterday. Yields on 30-year securities fell also 2 bps to 3.18% as the government prepared to auction $13 billion of 30-year notes this week.

Initial jobless claims in U.S. inched down last week. Claims for U.S. unemployment benefits fell by 1,000 in the week ending October 8th to 404,000, according to the Labor Department. The latest jobless claims data came in near markets’ expectations and showed the U.S. labor market is making stubbornly slow progress. Meanwhile, the four-week moving average of claims, seen as a less-volatile indicator of labor trends, fell by 7,000 to 408,000, the lowest level since mid-August. The government also reported last week that the U.S payrolls increased more than forecasted in September, rising by 103,000 after a 57,000 gain in August. The unemployment rate remained at 9.1%.