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US weekly jobless claims data came volatile this week. Markets have been using them as a guide to identify the US job market’s turning point for a few weeks now. In the early days of the epidemic, the same thing took place the other way around. Relying on a weekly figure that is known for its high volatility indicates that you add a lot of extra weekly volatility. especially when you are caught off guard.
US Treasuries have recently increased due to higher-than-anticipated weekly claims. Yesterday, the markets anticipated more of the same, but claims dropped from 265k to 239k (vs. 265k expected and lowest in a month), which led to a sell-off in US Treasuries. Indicatively setting the scene on Wednesday was Fed Chair Powell’s refusal to rule out consecutive rate increases in July and September, a possibility that wasn’t disregarded in the US money markets.
US yields rose by 9.2 bps (30-yr) to 16.4 bps (5-yr) in a daily perspective, with real yields driving the move higher. The US 2-yr yield (4.86%) rose to its highest level since mid-March and keeps the 5.08% cycle top on the radar.
