Treasury yields jump on drop in unemployment claims

July 20:

Weekly initial jobless claims dropped a bit to 228,000 last week, with the four-week moving average now at 237,500.

Outlook for manufacturing contraction continues in Philadelphia Fed region

The Philadelphia Fed Manufacturing Business Outlook’s index for general activity was -13.50 in July. The index has been negative since September, which indicates an outlook for contraction in manufacturing activity in the region covered by the Philadelphia Fed.

State of the market

Treasury yields rose this morning in response to weekly jobless claims, which are at their lowest level since mid-May, while the four-week average is the lowest it’s been since early June.  

The Dow traded up this morning.

Treasury calendar

Wednesday, July 19

• Yesterday’s $12 billion auction of 20-year Treasury bonds resulted in a yield of 4.036%, with demand lower than at the previous such auction. The 20-year bond is less popular than other longer-term Treasury securities. Its yield (4.07% as of this morning) is higher than yields on the 10-year note and 30-year bond, creating a kink in the yield curve.

Thursday, July 20

• $17 billion auction of 10-year Treasury Inflation-Protected Securities

By Mike Kraft, Executive Director and Commercial Real Estate Treasurer for Commercial Banking at JPMorgan Chase