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Jobless Claims Rise, Yield Curve Flattens

Jobless claims increase, sending yields lower

After yesterday’s sell-off in rates due to the Fed’s hawkish guidance, USTs rallied after weekly U.S. jobless claims unexpectedly increased to 412,000. Rates decreased on the long end of the curve, with the 10y UST yield decreasing 7 bps to close at 1.50%. The yield curve saw some flattening on the day with the short end of the curve increasing as investors continue to price in two rate hikes in 2023. The 3yr UST increased 2 bps on the day. Equities were mixed with the S&P and DJIA closing down and the tech-heavy Nasdaq, benefiting from the rates rally, increasing 0.87%.

Jobless claims unexpectedly increase

U.S. initial jobless claims increased to 412,000 last week, the highest number since May 15. Economists were expecting claims to decrease from the previous week’s 375,000 to 360,000.

Philly Fed business survey

The Philly Fed’s manufacturing activity index dropped to 30.7 in June, down from 31.5 in May. Analysts were expecting a decrease to 31. The prices paid index increased 80.7, up from 76.8.

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