NEW YORK: US Treasury yields rose on Thursday as stocks gained, reducing demand for safe haven assets, even after the government sold new 30-year bonds to strong demand.
Stocks have been volatile in the past few weeks over concerns about Chinese and global growth, with equity price moves in many cases leading bond trading.
Bonds "react immediately to a rally or selloff in equities," said Charles Comiskey, head of Treasuries trading at Bank of Nova Scotia in New York.
Benchmark 10-year notes were last down 15/32 in price to yield 2.23 percent, up from 2.18 percent late on Wednesday.
Treasuries weakened even after a strong $13 billion auction of 30-year debt, the final sale of $58 billion in new coupon-bearing supply this week.
"The auction went very well, it looks like anything close to the 3 percent area and people were buyers," Comiskey said.
The bonds sold at a high yield of 2.98 percent. Indirect bidders, which includes mutual funds and other asset managers, bought a record 66 percent of the sale.
The new supply came as investors continue to focus on the likelihood that the Federal Reserve will raise interest rates for the first time in almost a decade when it meets next week.
"There's a lot more uncertainty going into this meeting than there has been going into any Fed meeting over the years," said Lou Brien, a market strategist at DRW Trading in Chicago.
Investors are divided over whether a rate hike is likely, though market prices indicate declining anticipation that liftoff is imminent.
Expectations that the US central bank will act have fallen since the Fed gave no strong indication in the minutes of its July meeting that a September rate increase was likely.
Low inflation is also seen as complicating the Fed's ability to raise interest rates. Producer price data on Friday will next be in focus for any new signs of rising price pressures.
Heavy issuance of corporate debt has also weighed on Treasuries this week, with large sales continuing on Thursday after $26.8 billion in investment-grade deals priced on Wednesday.
Data on Thursday showed that the US labor market appeared to gain momentum in early September as fewer Americans filed for weekly unemployment benefits, but that inflation remained weak in August.
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