NEW YORK: US benchmark yields touched a five-week high on Thursday ahead of the sale of seven-year notes and after the Federal Reserve on Wednesday stuck to its monetary policy, prompting some Treasury investors to book profits.
Price losses were pared on Thursday morning however following data showing planned US business spending was flat in September, although new orders for long-lasting manufactured goods increased.
Data also showed new claims for jobless benefits fell last week, although economists pointed out the economy remains hobbled by persistently high unemployment.
"We are sideways with hiring," said Jacob Oubina, economist at RBC Capital Markets in New York. "The potential for employment growth will likely be soft over the next three months given the general slowdown in business investments and spending," said Jacob Oubina, economist at RBC Capital Markets in New York.
Treasuries began the day lower, extending Wednesday's price weakness after being undermined overnight by data showing third-quarter growth in the United Kingdom beat forecasts.
On Wednesday the Fed, as expected, held off taking any further easing steps after it launched a new round of bond purchases last month.
Investors also took the opportunity on Thursday to push Treasury prices lower to make way on their books for a $29 billion seven-year note sale later in the day. The auction follows sales of $35 billion of two-year notes on Tuesday and $35 billion of five-year notes on Wednesday.
Ahead of the Thursday's sale, seven-year notes on the when-issued market were trading with a yield near 1.285 percent, compared with seven-year yields on the open market near 1.27 percent.
Benchmark 10-year notes were trading 13/32 lower in price to yield 1.84 percent, up from 1.79 percent late Wednesday and breaking above the 200-day moving average near 1.81 percent. Benchmark yields reached as high as 1.86 percent, marking the loftiest since Sept. 17.
Thirty-year bonds were trading 23/32 lower in price to yield 2.99 percent, up from 2.95 percent late Wednesday.
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