NEW YORK: US Treasury debt prices drifted higher on Friday in choppy trading, as investors sought safety in government bonds after a softer-than-expected US housing report and amid a persistent downtrend in commodities and weakness on Wall Street.
US 30-year bond yields, which move inversely to prices, fell to a seven-week low, while benchmark US 10-year yields slid to a two-week trough. An unexpected drop in US new-home sales further underpinned the rally in the Treasury market. Data showed on Friday that sales of new single-family houses dropped 6.8 percent in June to a 482,000-unit annual rate. The consensus forecast was 517,000.
"Overall, a weaker-than-expected release that has marginally supported the Treasury market, although we'll concede the limited price action has done little to help aspirations for a larger move," said Ian Lyngen, senior government bond strategist at CRT Capital in Stamford, Connecticut.
The US Treasury market took its cue from stocks and commodities. The S&P 500 was lower on the day while the Thomson Reuters CRB index of commodities was down 0.4 percent.
"It's becoming a trend this week - yields falling. Obviously, there's not a lot of data this week, said Stanley Sun, interest rate strategist at Nomura Securities in New York. "So the Treasury market right now is kind of hostage to other macro markets." In mid-morning trading, benchmark 10-year Treasury notes were flat in price to yield 2.284 percent. Yields earlier fell to 2.255 percent, the lowest since July 9.
US 30-year bonds were up 6/32 in price to yield 2.972 percent. Yields earlier fell to 2.95 percent, the lowest since June 2. US seven-year notes were flat in price as well, yielding 2.03 percent. Earlier, seven-year yields fell to a two-week low of 2.001 percent.
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