Wednesday's fast-trading volatile session ended with some respite as Treasuries finished where they began and equities turned slightly upwards, but the safe haven trade is back on early Thursday.

The benchmark 10-year Treasury yield is four basis points firmer at 2.574% in early trading. A flight to quality pushed its yield down 45 basis points since July 28, and it's now down an entire percentage point since mid-April.

The two-year yield is steady at 0.324%, while the 30-year yield is six basis points firmer at 3.840%. Mortgages are starting the session higher in price but slightly wider in spread vs. TSYs. The Fannie Mae 4.0 MBS coupon is +7/32 at 102-28. MND has adjusted its hedge ratios down to 63% vs. 10s. That leaves the FN 4.0 almost 3 ticks wider to 10s.

Equities finally eked out a gain Wednesday, breaking an eight-day trend of swimming in the red, but ahead of new jobless claims data the major indexes are once again negative.

The S&P 500 looks to open 13.50 points lower at 1,241.00 and Dow futures are down 102 points at 11,715. 

Light crude oil fell 0.95% overnight to $91.06, while gold prices rose 0.10% to $1,667.90.

In the currency markets, the yen is all over the headlines with a 4% decline, according to BMO Capital Markets. 

The currency dropped after Japan "intervened unilaterally overnight to weaken the currency" - the third such move in six years - "and threw more stimulus behind the economy."

The 4% drop is the sharpest since 2008, BMO said, though it does little more than erase the previous month's gains.

Key Events Today:

8:30 - Initial Jobless Claims will take some on added importance after the report finally broke through the 400k barrier last week. New claims fell 24k in the week ending July 23 to 398k, its lowest level since early April. The report, considered "clean" by the Dept. of Labor, brought the four-week average down to 414k. If that level gets closer to the 400k mark it will signal renewed hopes for job growth.

"We have now moved beyond the auto retooling period and the Minnesota government layoffs have been absorbed so we expect lower readings from the claims data in coming weeks," said economists at Nomura Global Economics.