NEW YORK: US Treasuries yields fell on Thursday with benchmark yields retreating from 3-1/2-week highs as investors stepped back in the bond market a day after a broad selloff in Treasuries, German Bunds and British gilts.
A larger-than-expected 11.4 percent drop in domestic new home sales in March, together with disappointing global factory data, rekindled doubts about whether the U.S. economy is strong enough for the Federal Reserve to raise interest rates this year.
"The weaker economic data certainly helped pulled some bids back into the market," said Andrew Richman, fixed-income strategist at SunTrust Private Wealth Management in Palm Beach, Florida.
Uneasiness about Greece and its future in the euro zone also underpinned safe-haven demand for Treasuries.
Greek Prime Minister Alexis Tsipras called for a speeding up of work to conclude a reform-for-cash deal with euro zone creditors to keep his country afloat after talks with German Chancellor Angela Merkel on Thursday.
Benchmark U.S. 10-year Treasury note yields fell 3.5 basis points to 1.937 percent after hitting 1.993 percent on Wednesday, which was the highest in 3-1/2 weeks, according to Reuters data.
The 30-year bond yield slipped 3 basis points from late Wednesday to 2.623 percent, a day after reaching 2.679 percent, the highest in five weeks.
Analysts blamed Wednesday's market downdraft on factors including a perceived hawkish tilt in the minutes of the Bank of England's previous meeting and investors paring heavy holdings in Bunds due to the European Central Bank's bond purchase programs, and concerns about Greece.
The number of Americans filing for first-time jobless benefits rose unexpectedly last week by 1,000 to 295,000, but the underlying trend was seen consistent with employers hiring more workers.
Thursday's drop in yields was also limited by gains on Wall Street where the Standard & Poor's 500 and Nasdaq composite was on track to record closing highs.
On the supply front, the Treasury Department sold $18 billion of five-year Treasury Inflation-Protected Securities
to mediocre demand.
Low-yielding Treasuries were overshadowed by a robust corporate bond sector where AT&T launched a $17.5 billion deal, which is the third biggest ever, according to IFR, a unit of Thomson Reuters.
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