U.S. stock markets were expected to open lower on Thursday, judging by trade in equity index futures, as a sell-off in government bonds gathered pace.
The wild swings in bond markets are expected to take center-stage. Futures were little changed on U.S. data, while Treasury yields fell to session lows.
Weekly jobless claims came in at 276,000, below expectations and last week's 282,000 figure. The report comes ahead of the May U.S. non-farm payrolls report on Friday.
U.S. non-farm productivity fell at a 3.1 percent annual rate in the first quarter, down sharply from the previously reported 1.9 percent rate.
The benchmark-10-year Treasury yield, which moves in the opposite direction of its price, briefly topped 2.40 percent, setting a new high for the year. It tracked the 10-year German Bund yield, which soared to just shy of 1 percent, extending a rise that began on Wednesday after European Central Bank President Mario Draghi played down the impact of bond market volatility.
"Over the last few months we've seen some pretty extraordinary moves in the bond markets. In April, and again over the first few days of June, bonds have traded over 2-3 percent daily trading ranges - ranges that would be considered extreme a few years ago for such safe, predictable, non-volatile core investment instruments," Bill Blain, a strategist at Mint Partners, said in a note.
"It's not just bonds. We hear from investors they are increasingly concerned stock market valuations look overblown, and there are fears bubbles have developed in many other markets including property," he added.