NEW YORK: US Treasury debt prices rose on Friday after a three-day losing streak, with long-dated government debt supported by scheduled purchases of 30-year bonds by the Federal Reserve as it tries to stimulate lending and economic growth.
The bond market's modest gains followed a bout of selling as some investors reassessed the timing of another potential round of easing by the Federal Reserve, and riskier assets did better at the expense of safe-haven US debt.
On Friday, riskier assets turned slightly defensive. US stocks opened lower.
"With today's only event a 30-year (Fed) buyback, the only source of pressure will be if people challenge the modest overnight gains," said David Ader, government bond strategist at CRT Capital Group in Stamford, Connecticut.
What could make bond prices a little vulnerable to downward pressure is that prior technical supports were "violated" overnight: 10-year yields "around 1.976 percent, for instance, 5-year yields at 86 basis points," Ader said. Another test of those levels could prompt more selling, he added.
In early dealings, benchmark 10-year notes were up 10/32, their yields easing to 1.99 percent from 2.03 percent late on Thursday. The 30-year bond rose 18/32, its yield easing to 3.11 percent from 3.14 percent on Thursday.
Analysts said data on dealer positions pointed to long positions having been created in anticipation of month end.
Some of the most recent selling in the bond market was linked to some of those positions being unwound, they said.
Nonetheless, riskier assets had the upper hand in January and February as investors have become less anxious about the economic outlook and the stability of the financial system.
For safe-haven Treasuries, that has translated into a range-bound market.
Looking ahead, the main bond market focus next week is expected to be the release of the US Labor Department's monthly payrolls data. Economists polled by Reuters estimate that non-farm US payrolls added 210,000 jobs in February after adding 243,000 jobs in January. They expect the unemployment rate to remain steady at 8.3 percent.
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