US Treasuries tick up on spike in jobless claims
(Updates prices, adds comments; changes dateline, previous NEW YORK)
By Ros Krasny
CHICAGO, Jan 6 (Reuters) - U.S. Treasury prices edged up on Thursday following a report that weekly jobless claims were much higher than expected on the eve of the December payrolls report.
Many traders were awaiting comments on the economic outlook from Kansas City Fed President Thomas Hoening at 1 p.m. EST (1800 GMT).
The hawkish tone to December's Federal Open Market Committee minutes, released on Tuesday, heightened the market's sensitivity to any comment on inflation and monetary policy.
The 10-year Treasury note <US10YT=RR> rose 6/32 in price for a yield of 4.26 percent, down from 4.28 percent late Wednesday.
The benchmark yield has struggled for the past three days to hold above 4.30 percent. That mark is now support, with resistance likely to a move below 4.25 percent.
"Longer-term rates may still be headed higher, but that will likely not be seen at least until the receipt of the employment report," said Michael Cartine, senior Treasury analyst at IFR Markets.
Initial claims spiked to 364,000 for the week ended Jan. 2, against market expectations of 331,000 and the highest since late September.
The data gave some bond bears the jitters, especially coming after a jump in December lay-offs shown on Wednesday in the Challenger report.
However, the weekly series can be volatile, especially around the holidays, and this week's claims did not coincide with the survey week for monthly payrolls.
"This is all about the problems of seasonal adjusting weekly data over the holidays rather than the underlying trend in claims," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.
The 30-year bond <US30YT=RR> rose 9/32, yielding 4.83 percent, down from 4.85 percent on Tuesday. Five-year notes <US5YT=RR> rose 5/32 to yield 3.68 percent, down from 3.72 percent. Two-year notes <US2YT=RR> were up 3/32, yielding 3.17 percent.
Earlier, December chain store sales gave mixed guidance. Last-minute shopping helped U.S. retailers turn in a solid performance after a slow start to the holiday season, but often at the expense of hefty discounting that could hurt company profits.
((Reporting by Ros Krasny; Editing by Dan Grebler; Reuters Messaging:
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----MARKET SNAPSHOT AT 1718 GMT ------------------
Mar Eurodollar <EDH5> 97.06 (+0.01)
Mar T-Bond <USH5> 112-11/32 (+09/32)
Mar 10-year note <TYH5> 111-18/32 (+05/32)
Change vs Current
Nyk yield
Three-month bills<US3MT=RR> 2.29 (-0.02) 2.330
Six-month bills <US6MT=RR> 2.56 (-0.01) 2.624
Two-year note <US2YT=RR> 99-22/32 (+03/32) 3.168
Five-year note <US5YT=RR> 99-06/32 (+05/32) 3.685
10-year note <US10YT=RR> 99-29/32 (+06/32) 4.261
30-year bond <US30YT=RR> 107-31/32 (+09/32) 4.835
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