US Treasury debt prices fell on Thursday, as data showed the US economy grew at a faster-than-expected pace in the third quarter, raising hopes of an emergence from the worst recession in 70 years. A rebound in US stocks also gnawed at the bid for low-risk government debt, while some disappointment over the level of demand in an auction of $31 billion of seven-year notes also took a bite out Treasury debt values.
Benchmark 10-year Treasury notes were trading 23/32 lower in price to yield 3.50 percent, up from 3.42 percent late on Wednesday, while the 30-year bond was 1-15/32 lower to yield 4.35 percent, up from 4.26 percent late in the previous session. The 3.5 percent third-quarter rise in US gross domestic product beat a 3.3 percent increase forecast by economists. The government's first GDP reading for the quarter surprised some traders, who lowered their outlook in the wake of disappointing data in recent days.
Treasuries briefly extended losses on Thursday afternoon in some disappointment that there was not a larger appetite for seven-year notes in the auction. The sale was part of a record-large weekly offering of $123 billion of Treasury notes, and investors continue to fret over the possibility of waning demand for the massive doses of US government debt.
Seven-year notes were trading 17/32 lower in price to yield 3.09 percent, up from 3.00 percent late on Wednesday. Bonds were also undermined early in the day by the latest figures showing the number of workers filing for unemployment benefits has been falling, although they remain at elevated levels.
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