NEW YORK: US Treasury debt yields declined on Thursday, with the 30-year yield hitting a two-month low in advance of $12 billion of 30-year bond supply, the final leg of this week's $56 billion in longer-dated government debt supply.
The bond market continued to recover from a dramatic selloff following Donald Trump's surprise presidential win on Nov. 8.
Benchmark Treasury yields have fallen from their highest levels in over two years reached in mid-December on renewed appetite for bonds and a lack of details on economic stimuli pledged by Trump during his campaign.
Trump, in his first news conference since capturing the White House on Wednesday, did not disclose more on his plan for tax cuts, infrastructure spending and looser regulations. Still, he criticized the high pricing of drugs and defense equipment and promised to slap a border tax on companies that move jobs overseas.
Traders had bet that Trump, with a Republican-controlled Congress, would enact measures to promote spending and investment, which may also fuel inflation and federal borrowing.
"Trump's lack of economic focus at yesterday's press conference was a disappointment for those looking for details on his stimulus plan, or perhaps better said, for those holding out for details on his stimulus plan," NatWest Markets analysts wrote in a research note.
The yield on benchmark 10-year Treasury notes was 2.332 percent, down 4 basis points from late Wednesday. Earlier it fell below its 50-day moving average, a bullish technical signal, for the first time since late September, according to Reuters data.
The 30-year bond yield was down nearly 4 basis points at 2.921 percent after touching 2.902 percent, the lowest in two months.
As traders second-guessed Trump's economic policies, Federal Reserve officials hinted on Thursday that more interest rate increases are coming following a widely expected quarter point hike in December.
The US economy is gathering enough strength to warrant three rate increases in 2017, Philadelphia Fed President Patrick Harker said.
The labor market showed resilience with jobless claims rising to a lower-than-expected 247,000 last week.
Despite the likelihood of more rate hikes, investors seem focused on adding bonds back to their portfolios after dumping them following Trump's election win, analysts said.
In "when-issued" activity, traders expected the latest 30-year bond supply to sell at a yield of 2.972 percent , according to Tradeweb.
Last month, the Treasury sold 30-year bonds at a 3.152 percent yield, the highest since September 2014.
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