A typically quiet, though anxious post-holiday, pre-employment trade mired Treasuries at lower levels through most of Thursday's session, with the long bond closing off 16/32.
Stronger-than-expected NAPM non-manufacturing data was the catalyst for early selling in the market. Despite the fact that it was third-tier data, the index's rise to 52.1 panicked longs. Thin conditions, lack of committed buyers in front of Friday's key non-farm payroll figures, and bearish technicals then kept the market heavy through the day. Indeed, not even triple digit losses in stocks, nor a rise in initial claims, nor an escalation in announced job layoffs were sufficient to support Treasuries.
Bonds had started the day in positive territory, with the short end leading on weakness in U.S. stocks as a crushing warning from the UK's Marconi rippled across the pond. But, an unexpected jump in the NAPM non-manufacturing index overshadowed the rise in Challenger's announced layoffs. Dealer selling was moderate, but a lack of buyers in front of the payroll report kept Treasuries weak. Dollar strength was also ignored.