US Treasuries prices fell on Thursday with benchmark yields rising from 3-1/2-month lows as a rebound on Wall Street and in the oil market scaled back appetite for low-risk government debt, but jitters remained on further losses in those sectors. Remarks from European Central Bank President Mario Draghi suggesting that the bank could launch additional stimulus measures in the euro zone led to selling of US government debt in early trading.
A poor auction of $15 billion in 10-year Treasury Inflation Protected Securities added to the market's weakness, briefly knocking one point off the 30-year bond's price. "It's a little bounce that's correlated with improvement in equities and oil. I don't think we touch a bottom by any means," said Richard Schlanger, portfolio manager at Pioneer Investments USA in Boston.
Bond market losses were limited by nagging doubts about the durability of the US economic expansion in light of global market turbulence, worries about China and the glut of oil world-wide. Thursday's data that showed weekly domestic first-time filings for jobless benefits climbing to a six-month peak stoked doubts whether the labor market is strong enough for the Federal Reserve to raise interest rates in 2016.
"There isn't a lot of risk appetite. Any stability seems to be sold into," said Gennadiy Goldberg, interest rate strategist at TD Securities in New York. In late trading, benchmark 10-year Treasury notes were down 11/32 in price with a yield of 2.021 percent, up 4 basis points on the day. The 10-year yield climbed from 1.939 percent on Wednesday, which was the lowest since early October. The 30-year bond was down 31/32 in price, yielding 2.803 percent, up 5 basis points. The 30-year yield had touched 2.711 percent on Wednesday, which was the lowest since August 24, according to Reuters data. Two-year yield which is more sensitive to changes in traders' view of Fed policy, edged up 1 basis point to 0.833 percent after hitting its lowest level in 2-1/2 months on Wednesday.