NEW YORK (MarketWatch) -- Treasury prices headed towards a weekly gain, with long-term yields falling on Friday, as decent demand at the week's $81 billion in note and bond auctions and a decline in consumer confidence added to the appeal of government debt.
Yields on 10-year notes (UST10Y 3.45, +0.02, +0.49%) fell 1 basis point for the session to 3.44%. A basis point is one one-hundredth of a percentage point. Yields move inversely to bond prices.
Ten-year yields ended last week at 3.50%.
Thirty-year bond yields (UST30Y 4.39, 0.00, 0.00%) declined 2 basis points to 4.38% for the session and were little changed from a week ago.
Two-year note yields (UST2YR 0.82, +0.02, +2.87%) increased 2 basis points to 0.83%. That's down from 0.85% a week ago.
Consumer sentiment pulled back in early November for a second straight month, according to the Reuters/University of Michigan index, which unexpectedly fell to 66.0 from 70.6 in October.
Bonds had a mixed reaction to earlier data showing the nation's trade deficit expanded 18.2% in September to $36.5 billion, the Commerce Department said. This is the largest trade gap since January. The bigger-than-expected trade gap may cause the government to reduce its estimate for third-quarter growth. See story on trade gap.
Separately, import prices rose 0.7% last month. See more on import prices.
"We would deem this data more bearish for bonds," strategists at CRT Capital Group said.
Longer-term yields remained lower as analysts interpreted the positive moves late Thursday after the final auction of the week as a confirmation that enough demand remained for Treasurys to enable to government to easily finance its deficits, for now.
The U.S. sold $40 billion in 3-year notes (UST3YR 1.37, +0.02, +1.18%) , $25 billion in 10-year notes and $16 billion in 30-year bonds in its quarterly refunding. No note or bond sales are scheduled for next week.
Also, long-term yields remain near levels that investors deem attractive, putting a lid on increases.
"The positive performance following yesterday's supply should keep an underlying bid on declines with the buying on backup as 10 year sees 3.50% and likely seeing bond interest on approach of 4.50% will keep the current range trade in place before the next supply bulge," said John Spinello, Treasury strategist at Jefferies & Co., one of the 18 primary government security dealers required to bid at Treasury auctions.
