By Deborah Levine, MarketWatch NEW YORK (MarketWatch) -- Treasury prices were mixed early Friday after data showed the U.S. trade deficit widened more than forecast, indicating some resumption in global economic activity. Before the data, traders were parsing the demand seen at the week's $81 billion in note and bond auctions. Two-year note yields (UST2YR 0.80, -0.02, -2.91%) increased 1 basis points, or 0.01%, to 0.82%. Yields move inversely to bond prices. Yields on 10-year notes (UST10Y 3.44, 0.00, 0.00%) , fell 2 basis points to 3.43%. Thirty-year bond yields (UST30Y 4.39, -0.02, -0.41%) declined 3 basis points to 4.37%. The nation's trade deficit expanded 18.2% in September to $36.5 billion from $30.8 billion in August, the Commerce Department said. This is the largest trade gap since January. The larger-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. Still to come at 10 a.m. Eastern time is a report expected to show consumer sentiment improved in early November. Longer-term yields remained lower as analysts interpreted the positive moves late Thursday after the final auction of the week was done as a confirmation that enough demand remained for Treasurys to enable to government to easily finance its deficits, for now. 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 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.

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