Longer-dated treasuries continued to be wound down Thursday ahead of Friday's payrolls results -- immune to further leprosy in the manufacturing sector, which cast doubt on Q2 GDP growth. Profit taking set the tone and the weight of supply and suspense both induced yields to back up, particularly at the front end, which left the curve slightly flatter.
More external verbal support for Argentina also boosted Latin America sentiment, taking some flight premium out of two-year bonds and five-year bonds. Initial jobless claims put a rosier tint on the jobless outlook for Friday, falling 23,000 to 346,000, but the data was surely distorted by auto retooling. June Factory Orders, however, tumbled 2.4% and the Chicago Fed's National Activity Index slid 1.02.
Stocks rallied after Intel repeated hope for a second half rebound in chip orders, but got dragged down into the earnings swamp in the end. September 10-year bonds broke below their 50-day moving average and trendline support at 105-16, while the September bond closed down 20/32 at 103-05. The two-year note and 30-year note spread narrowed modestly to +170 basis points, weathering early pressure.
The Bank of England cut rates, but the European Central Bank declined to follow.