Thursday, April 30, 2009

Unemployment Claims Improve..

but not by much.

April 30 (Bloomberg) -- Fewer Americans filed first-time applications for unemployment insurance last week, indicating the pace of job losses is slowing even as the total number of people on benefits continues to break records.

Initial jobless claims decreased by 14,000 to a less-than- forecast 631,000 in the week that ended April 25, from a revised 645,000 the prior week, Labor Department figures showed today in Washington. The number of people staying on jobless benefit rolls increased by 133,000 to 6.27 million, the 13th straight week the figure has set a record.

Interest rates have been thriving on dismal economic news and are now resting on the upper boundary of a possible trading channel. Despite continued strength in rate movement, Volatility strength as measured on the daily basis, is starting to weaken. A much stronger move is needed today to keep this rally going on a short term basis. End of month portfolio shifting could also be contributing to the recent move.
With the power of the Fed lurking in the background, rates may reverse course temporarily. While the Fed is big, the Global bond market is even bigger. It will be interesting to see what the Fed does in implementing their long-term treasury buyback plan. While their timing is important, the size of their purchase will show how serious they are about driving rates down below 3%.

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