US Government bonds plunge on lower initial jobless claims

The US Treasuries saw downward pressure across the curve Thursday as fewer Americans filed applications for unemployment benefits last week, highlighting the US job market remains healthy.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose more than 3 basis points to 1.567 percent, the yield on 5-year bond bounced 2 basis points to 1.140 percent and the yield on short-term 2-year note climbed ½ basis point to 0.746 percent by 12:30 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.

Moreover, 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 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.

In addition, Richmond Fed President Lacker said late yesterday that he still sees a strong case for a September rate hike, despite the weak ISM data. He pointed out that GDP and employment seem to be 'on track'.

Meanwhile, the S&P 500 Futures traded 1 point higher at 2,186 by 12:30 GMT.