The Day Ahead: Jobless Claims and Treasury Auction Terms

Interest rates and equity futures are flat ahead of the weekly jobless claims report and tomorrow’s monthly employment report.

All major U.S. equity indices have now charged back above their 50-day moving averages, and tomorrow’s report will be a key factor in determining if that strength can continue,” noted economists at BMO. “Interestingly, the near-10% jump in the S&P 500 since the start of July has come despite flat 10-year Treasury yields, which now sit just below 3%.”

Ninety minutes before the bell, Dow futures are up 15 points to 10,650 and S&P 500 futures are 0.50 points at 1,124.75. The 2-year TSY note yield is less than 1bp higher at 0.577%. The 10-year Treasury note is less than 1bp lower at 2.952%. The September delivery FNCL 4.0 is unchanged at 101-27 and the September delivery FNCL 4.5 is unchanged at 104-05.

Key Events Today:

8:30 ― A quiet Thursday awaits as only Jobless Claims, a weekly look at the labor markets, is set for release. The report has been volatile in recent weeks due to annual retooling of auto manufacturing plants. The four-week average is currently 453, compared to 467k in June and 458k in May. Last week’s survey showed 457k people filing for unemployment benefits.

Economists at Nomura said the distortion “should now be fading.” They expect to see a gradual drift down to 450,000 ― the threshold that economists often say points to national job growth.

11:00 ― Treasury announces the terms of 3-year, 10-year, and 30-year auction supply to be sold next week