The bond market is acting like nothing happened this morning. Prices are little changed ahead of the release of the September
tomorrow morning. Earlier, however, they traded down sharply for no clear reason.
With no major economic reports out today and no significant movement in gold, oil or the dollar against the yen, the benchmark 30-year Treasury bond was lately down 3/32 at 99 6/32, its yield unchanged at 6.18%. Shorter-maturity note yields were likewise unchanged.
But shortly after 8:30 a.m. EDT, the long bond traded down as much as 22/32, sending its yield up to 6.23%. A close above 6.20%, which corresponds to an important technical level in the bond futures market, would be worrisome,
Donaldson Lufkin & Jenrette
Treasury market strategist David Ging said.
The move was surprising because both the
European Central Bank
Bank of England
-- following in the
Tuesday footsteps -- opted to leave interest rates unchanged at their meetings today. And while ECB President
made an array of comments about improving global growth that strongly indicated the ECB will hike rates in the future, those coincided with Treasuries' lows.
Michael Pianin, vice president at
ING Futures & Options
, said the downtrade occurred in part because an attempt to rally on the European rate news failed, and in part because yesterday's rally (the bond futures contract listed on the
Chicago Board of Trade
closed up 5/32), "was feeble -- really just to alleviate an oversold condition" from the previous session."
"Now it's a lot of fun and games ahead of the number," Pianin added, referring to the employment report.
The day's only economic indicator was market friendly.
Initial jobless claims
rose to 312,000 from a revised 302,000 the previous week, the highest level since mid-July.