LONDON: US Treasury prices stabilised on Thursday, with a supportive global tone for highly-rated debt countering nerves over an upcoming auction of seven-year bonds after a lacklustre five-year sale on Wednesday.
The yield on the 10-year notes stood at 2.20 percent , little changed from late US levels but up from a two-week low of 2.16 percent hit before Wednesday's auction of five-year notes drew weak demand.
The Treasury Department's sale of $29 billion in seven-year notes was expected to mirror the results of the five-year auction, keeping debt prices subdued.
The market was, however, still seeing underlying support after Federal Reserve Chairman Ben Bernanke's assurances earlier this week that US interest rates will remain low for an extended period.
"Going forward these yield levels have brought out some real money accounts especially overseas accounts who had missed the latest trade up have started to take a bite out of the market," a trader said.
The seven-year T-note last yielded 1.59 percent in the secondary market, little changed from late New York trade. T-note futures were last 3/64 lower at 129-17/32
Market players also noted that while recovery in the US job market has been firm, other data has shown patchy recovery.
New orders for long-lasting US factory goods increased only modestly in February, supporting the view that economic growth in the first quarter could be lacklustre.
The market will be looking to upcoming data, such as next week's payroll data, as well as the minutes of the Federal Reserve's policy meeting earlier this month, which is due on Tuesday next week, for clues on the thinking within the Fed on policy.
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