US Treasury debt prices eased on Thursday as investors uneasily awaited word of how much debt the government will auction next week. Although the Federal Reserve was buying Treasuries on Thursday, the market was focusing on an expected flood of new debt supply to fund various rescue programs for the economy and the financial industry.
The Treasury will announce the size of next week's note issues later on Thursday morning. Losses were mitigated by some weakness in the stock market, which bolstered the safe-haven appeal of government debt.
Benchmark 10-year Treasury notes were trading 10/32 lower in price for a yield of 2.98 percent, the highest in over a month and up from 2.94 percent late on Wednesday. Two-year notes were unchanged in price for a yield of 0.97 percent. Investors largely shrugged off data showing existing home sales fell by more than expected in March. The Fed was purchasing Treasuries on Thursday as part of a program to free up lending and lower interest rates such as those on mortgages.
Earlier this week the Fed bought $7.3 billion of Treasuries. The central bank has said it will buy a total of $300 billion of government coupons over a six-month period. While Fed buying has been supportive of Treasury prices, investors remain wary of an expected wave of debt supply. Analysts expect the government will issue $2 trillion of new debt this year.