The U.S. Treasuries strengthened after data showed weaker than expected initial jobless claims figure. The yield on the benchmark 10-year Treasury note fell 1bp to 1.859 pct and the yield on the short-term 2-year bonds dipped 1bp to 0.895 percent by 1240 GMT.
The US Initial jobless claims for the week ending 21 May decreased -10k to 268k, below the market expectations for 275k, from unrevised 278k reading seen in the week prior. The 4-week average was reported at 278.5k, from the unrevised 275.8k reading seen in the week prior. Meanwhile, continuing claims for week ending 14 May decreased to 2.163mln, versus the revised 2.153mln reading seen prior (prev. 2.152mln). The insured unemployment rate held unchanged at 1.6%.
On the other hand, investors shrug off firm crude oil prices, which jumped more than 1 percent and crossed $50 mark for first time in seven months after the U.S. government reported a larger-than-expected drop in crude inventories. According to the US DOE, crude inventories decreased 4.2 million barrels, as compared to a build of +1.3 million barrels seen prior for the week ending 20 May. This came alongside an increase seen in gasoline inventories of +2.0 million barrels, from a draw of -2.5 million barrels seen prior and a decrease in distillate inventories of -1.3 million barrels, against a draw of -3.2 million barrels. The International benchmark Brent futures rose 1.30 pct to $50.38 and West Texas Intermediate (WTI) jumped 1.13 pct to $50.12 by 1240 GMT.
Markets now look ahead to pending home sales, followed by a 7-Year note auction later in the session. Meanwhile, S&P 500 Futures rose 0.11 pts to 2,089.50 by 1240 GMT.
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