US Treasuries were steady as investors waited on Friday's employment data for January, which will be evaluated for any new indications on when the Federal Reserve is likely to next raise interest rates. The US central bank's meeting on Wednesday was viewed as more dovish than expected after it said job gains remained solid, inflation had increased and economic confidence was rising, but gave no firm signal on the timing of its next rate move.
Prices gained earlier on Thursday as traders saw follow-through from the Fed's more dovish stance, before giving up gains to trade flat on the day.
"Peoples' takeaway was that the Fed has elongated their view that they really don't have to do very much and are waiting on a pickup of inflation over 2 percent, and they aren't really in a hurry to raise rates," said Tom di Galoma, a managing director at Seaport Global Holdings in New York.
US bonds also gained with the European bond market on Thursday morning.
"I think we were more reacting to what was going on in other markets this morning than what was going on domestically, and once those markets closed, we pulled back," said Dan Mulholland, head of Treasuries trading at Credit Agricole in New York. He noted that "the dollar was a little bit weaker this morning, which probably brought in some buyers."
US benchmark 10-year Treasury notes ended little changed on the day to yield 2.47 percent, after yields earlier fell to 2.43 percent.
Traders are also preparing for new debt supply next week, when the Treasury Department will sell $62 billion in three-year, 10- and 30-year debt.
That is weighing on longer-dated debt. The yield curve between five-year notes and 30-year bonds steepened to 116 basis points, the most since December 14.
"Yesterday the curve flattened right into the Fed meeting pretty aggressively, then quickly reversed course when the Fed was a little bit less-hawkish than expected. I think that's probably reflective of positioning and next week's supply," said Mulholland.
Data on Thursday was mixed. US worker productivity slowed in the fourth quarter, while the number of Americans filing for unemployment benefits fell more than expected last week. Friday's employment report for January is expected to show that employers added 175,000 jobs in the month, according to the median of 102 economists polled by Reuters.