NEW YORK (CNNfn) - Treasury bond prices fell for the six consecutive trading session Thursday morning on continuing fears that another interest rate hike lies ahead -- fears fueled by expectations of a strong August employment report on Friday.
Just before 9:15 a.m, ET, the price of the benchmark 30-year Treasury bond fell 16/32. Its yield, which moves in the opposite direction from the price, rose to 6.11 percent from 6.08 percent Wednesday.
The morning's sell-off comes amid a series of bond market negatives, including a weakening dollar, rising commodity prices, and fears over a large calendar of new corporate bonds scheduled for sale in September.
But the biggest concern among bond investors is a continued batch of strong economic data, from housing starts to manufacturing output, that is fueling fears about a possible third interest rate hike before year's end.
"We don't see any indication that the Fed would have caused to start talking more tolerantly about monetary policy," said Christine Callies, strategist at Credit Suisse First Boston. "And we don't think the bond market has any particular reason to go down to lower yield levels."
In the day's first economic indicator, the number of Americans filling for first-time unemployment benefits rose to 289,000 for the week ended Aug. 28, up from a revised 285,000 the previous week. The figure, which matched forecasts, is consistent with the tight labor market and low unemployment that has existed for the past two years.
The strong data comes 24 hours before the Labor Department releases August employment figures. Analysts expect the unemployment rate to remain unchanged at 4.3 percent, near a 30-year low, with employers adding 220,000 non-farm jobs during the month.
Already, fears of rising inflation have led the Federal Open Market Committee to hike short-term interest rates by a quarter percentage point in both June and August.
Ahead Thursday at 10 a.m., ET, the Labor Department will issue another reading on second-quarter productivity, which is expected to have risen 0.8 percent, compared with 1.3 percent in the first reading last month. Also at 10 a.m, Commerce Department reports on July factory orders. Estimates call for a 1.8 percent increase, compared with 0.7 percent growth a month earlier.
Strength in factory orders would come amid a trend of rising orders for durable goods and a rebound in manufacturing. Much of this rebound has been linked to increased demand for American goods from overseas, as Asia -- and Japan in particular -- appear to be recovering from recession.
This recovery, in turn, has affected the currency market, where the dollar continues to trade near seven-month lows to the Japanese yen
Just before 9:15 a.m. ET, the dollar slipped to 109.09 yen from 109.20 Wednesday, a 0.10 percent drop in the dollar's value. The U.S. currency also slipped against the euro. It cost $1.0672 to buy one euro compared with $1.0580 Wednesday, a 0.16 percent drop in the dollar's value.