By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices held on to slim gains Thursday, pushing yields down, after a report showed U.S. first-time jobless claims fell more than some economists expected.
Yields on 10-year notes (UST10Y 3.53, -0.01, -0.23%) , which move inversely to prices, fell 1 basis point to 3.51%. A basis point is one one-hundredth of a percentage point.
Yields on 2-year notes (UST2YR 0.67, -.00, -0.59%) declined 1 basis point to 0.66%.
Thirty-year yields (UST30Y 4.60, -.00, -0.07%) added 1 basis point to 4.60%.
The Labor Department said initial claims for unemployment benefits fell 3,000 to 420,000 in the latest week. A separate report showed housing starts rose 3.9% to a 555,000 pace last month. Read about jobless claims.
“Despite the rebound of starts, the level of construction remains well below its recent highs,” said Millan Mulraine, a strategist at TD Securities.
Also lending some support to bonds, the Federal Reserve will be buying debt later in the session as it continues its quantitative-easing program as planned.
Bond yields rose sharply late Wednesday, pushing 10-year yields to a new seven-month high, after rebounding from a steep jump late Tuesday. Traders attribute the volatility to illiquidity that is typical at the end of every year, more so than any economic data or policy pronouncements. Read about Wednesday’s bond market.
“We expect the Treasury market to remain volatile over the next few weeks as year-end liquidity is drying up and most are looking for the year to end,” said Thomas di Galoma, head of U.S. fixed-income trading for Guggenheim Securities.
