US Treasuries down as jobless claims remain at historically low level

The US Treasury prices are down slightly further on Thursday as first-time filings on domestic jobless claims rose in line with forecast in the latest week, suggesting steady improvement in the labor market. The 10-year bond yield made a late surge prior to yesterday’s close to over 1.50 percent, the highest since the UK's referendum date.

The yield on the benchmark 10-year Treasury note rose 2-1/2 basis points to 1.502 percent and the yield on short-term 2-year note climbed 1 basis points to 0.637 percent by 12:30 GMT.

US Initial jobless claims for the week ending 25 June increased +10k to 268k, in line with expectations for a 267k result, as compared to the revised 258k reading seen in the week prior (previous was 259k).

The 4-week average was reported at 266.8k, unchanged from the revised 266.8k reading seen in the week prior (previous 267k). Meanwhile, continuing claims for week ending 18 June decreased to 2.120 million, versus the 2.140 million reading seen prior. The insured unemployment rate decreased to 1.5 percent (down from 1.6 percent).

On Wednesday, the May US Commerce Department personal income and spending report revealed an overall +0.4 percent m/m reading in personal spending, versus the revised +1.1 percent m/m reading seen in April (previous +1.0 percent m/m), in line with expectations for a +0.4 percent m/m increase.

Meanwhile, personal income came in +0.2 percent m/m in May, versus the revised +0.5 percent m/m reading that occurred in April (previous +0.4 percent m/m), just below expectations for a +0.3 percent m/m increase. On a real basis, personal spending increased +0.3 percent m/m, following the +0.8 percent m/m reading seen in April.

Alongside the solid improvement seen in April and May, we anticipate greater traction will be seen in the coming months as employment conditions improve and consumer activity becomes more sustained.

Meanwhile, the S&P 500 Futures up 1 point to 2,067.75 by 12:30 GMT.