Treasuries rise

Treasuries prices rose on Thursday, boosted by purchases of US government debt by the Federal Reserve and the end of this week's Treasury auctions. The Fed bought $8.41 billion in notes due 2016 and 2017 as part of its $600 billion bond-purchase program designed to stimulate the economy. It will purchase another $6 billion to $8 billion in debt due 2015 and 2016 on Friday.
The purchases come as the Treasury concluded its sales of $66 billion in three-, 10- and 30-year securities this week. The $13 billion 30-year bond auction on Thursday drew an average bid after three- and 10-year note auctions earlier in the week attracted strong bidding.
"We (think) the Treasury market will rally with lower rates ahead in the short term," said Justin Lederer, interest-rate strategist at Cantor, Fitzgerald in New York. The benchmark 10-year bond rose 16/32 in price, its yield easing to 3.31 percent from 3.38 percent late Wednesday. Five-year notes rose 10/32 in price, its yield easing to 1.92 percent from 1.98 percent on Wednesday.
Prices of US government debt, a safe-haven asset, weakened early in the session following stronger than expected receptions for debt sales by Spain and Italy. Also, German Finance Minister Wolfgang Schaeuble said that major European states were working on a "comprehensive" medium-term package to solve the region's debt crisis.
But purchases of Treasuries by the Fed halted selling and subsequent buying lifted prices ahead of the bidding deadline for the 30-year auction, which went off without a hitch. "The 30-year bond auction was a bit sloppy and the bid cover ratio of 2.67 was (slightly) weaker than last month's sale, but it was still quite a bit better than (the 30-year auctions in October and November)," said Thomas Simons, money market economist at Jefferies & Co in New York.
Thirty-year bonds were up 17/32, their yields easing to 4.50 percent from 4.53 percent Wednesday. Economic data released on Thursday pointed to stubborn headwinds for the economic recovery and weaker-than-expected economic data is positive for bond prices. The Labour Department said US jobless claims jumped last week to their highest level since October.