Overnight Treasuries declined following China's PMI release which hit an 18 month high of 52.0 vs. 50.7 prior, damping demand for the safe haven assets. In the US this morning Jobless claims hit an 8-Year low for the July 19th week at 284K vs. 307K prior (consensus 302K), and Continuing Claims fell to 2500K vs. 2507K prior (consensus 2510K). This is good news for the labor markets and US economy as a tightening labor market could lift wages and spur consumer spending leading to economic growth. Markit Manufacturing PMI for July is expected to edge up to 57.5 vs. 57.3 prior and New Home Sales (MoM) are expected to decline -5.8% following an +18.6% rise in May. Treasuries have slumped to session lows following the hotter than expected initial/continuing claims data and the curve has bear steepened with 2s10s up 1.5 bps.
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