US DATA: Single-Family Housing Activity Continues To Deteriorate

• -19,900 FVU5 108-06.5, sell through 108-07.25 post time bid at 0838:10ET, DV01 $867,000.
• The 5Y contract trades 108-04.5 last (+0.5).

The weekly jobless claims data confirmed recent deterioration in the labor market. There was a sizeable step higher in initial claims compared to recent payrolls reference periods along with the highest four-week moving average since Aug 2023, whilst continuing claims hovered close to the previous week's fresh high since late 2021. 

• Initial jobless claims were as expected at 245k (sa, cons 245k) in the week to Jun 14 – a payrolls reference period – after a slightly upward revised 250k (initial 248k).
• This can still be revised next week but for now it points to a clear step higher from reference payroll periods (226k for May, 216k for Apr, 225k for Mar and 224k for Feb).
• The four-week moving average increased to 246k from a marginally upward revised 241k (initial 240k) for its highest since Aug 2023.
• Continuing claims were a touch higher than expected at 1945k (sa, cons 1941k) in the week to Jun 7 after a slightly downward revised 1951k (initial 1956k).
• It rules out a larger downward revision from what had been a firm uptick in continuing claims in the prior week for a fresh high since late 2021, with only a marginal improvement seen in latest data.
• The claims rate saw a second week at 1.28% after two weeks at 1.25%. Increases from what had been sustained 1.2% readings has drawn some attention in recent weeks. 

• +8,000 SFRU6 96.69, post time offer at 0839:00ET.
• Contract trades 96.685 last (+0.025) vs. high at 96.695