NEW YORK: US Treasury debt prices fell on Thursday as China's beaten-down stock markets rose after recent huge falls and Wall Street bounced back from sharp losses.
Yields on long-term Treasuries backed away from five-week lows reached this week on worries about the Greek debt crisis and a rout in Chinese equities, which undermined investors' confidence about global economic growth.
Chinese equities have slumped more than 25 percent since the middle of June, but on Thursday China's main stock market jumped 6.4 percent after a securities regulator ordered shareholders with stakes of more than 5 percent not to sell shares for the next six months.
The Chinese stock surge helped other equities markets around Asia and elsewhere pivot to gains after five days of losses, while depressing demand for safe-harbor bonds. Wall Street rose well over 1 percent before easing to gains of 0.40 percent in late trading.
European shares rose over 2 percent as Greek Prime Minister Alexis Tsipras rushed to finalize tax hikes and pension reforms needed to win new aid. Without the money Greece will have to print another currency, probably leading to its exit from the euro.
China's stock rise and brightening hopes Greece may strike a debt deal may be short-lived but had eased worries that had fueled the rally in Treasuries, according to Jack McIntyre, portfolio manager at Brandywine Global Investment Management in Philadelphia.
"There is a little sigh of relief," McIntyre said. "People are saying, 'the world may not be imploding'."
A Treasury debt auction and a flurry of rate locking deals by corporate issuers also spurred selling, according to Guy Haselmann, head of U.S. interest rate strategy at Scotiabank in New York.
"The Treasury market will trade fine tomorrow, meaning prices will go up and some yields will fall back again," Haselmann said. "The troubles in China, Greece and elsewhere are not going to go away."
Prices eased further after the Treasury sold $13 billion of 30-year bonds to soft demand.
Treasury data showed the government paying a yield of 3.084 percent, higher than traders had expected. Last month, the same amount of 30-year Treasuries supply cleared at a yield of 3.138 percent, a nine-month high.
Yields on the 30-year bond were knocked under 3 percent on Wednesday but were last at 3.1007 percent, reflecting a price drop of 2-9/32.
The 10-year note was down 27/32 in price and yielding 2.3049 percent.
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