US Treasuries plunge on upbeat jobless claims report, Fed rate hike probability strengthens

The US Treasuries saw downward pressure across the curve Friday during a relatively quiet session that witnessed data of little significance. The sold-off was largely influenced by lower than expected jobless claims that pointed to sustained and healthy labour market.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose more than 5 basis points to 1.611 percent, the yield on 5-year bond bounced 3 basis points to 1.179 percent and the yield on short-term 2-year note also climbed 3 basis points to 0.774 percent by 10:10 GMT.

The US Initial jobless claims for the week ending 3 September August decreased -4k to 259k, below expectations for a 265k result, as compared to the unrevised 263k reading seen in the week prior.

Additionally, the 4-week average was reported at 261.3k, down from the unrevised 263.0k reading seen in the week prior. Meanwhile, continuing claims for the week ending 27 August decreased to 2.144 million, versus the 2.151 million reading seen prior. The insured unemployment rate held unchanged at 1.6 percent. This will encourage the Federal Reserve officials looking to raise the benchmark interest rate before the end of 2016.

Markets now look ahead to wholesale inventories to finish off the week on Friday, ahead of a greater flow of data in the week ahead, highlighted by retail sales, producer prices, consumer prices, Philadelphia Fed and Empire manufacturing releases.

Meanwhile, the S&P 500 Futures traded 4 points lower at 2,174 by 10:10 GMT.