US Treasuries slump as lower jobless claims hint at economic strength

The US Treasuries witnessed selling across the curve on Thursday after jobless claims data surprisingly declined to three-month low in the week ended July 16. Also, a sustained low level of jobless claims indicates improving job market in the US.

The yield on the benchmark 10-year Treasury note rose more than 2 basis points to 1.601 percent and the yield on short-term 2-year note also bounced 2 basis points to 0.723 percent by 12:40 GMT.

The US Initial jobless claims decreased -1k to 253k for the week ending 16 July, well below expectations for a 265k result, as compared to the unrevised 254k reading seen in the week prior. The 4-week average was reported at 257.8k, down from the unrevised 259.0k reading seen in the week prior.

Meanwhile, continuing claims for week ending 9 July decreased to 2.128mln, versus the 2.153mln reading seen prior. The insured unemployment rate decreased to 1.5 percent, from down 1.6 percent.

Now investors await existing home sales and leading indicators releases, followed later by a 10-year TIPS auction.

Meanwhile, the S&P 500 Futures down 2 points to 2,165 by 12:40 GMT.