Treasury prices added to losses on Wednesday after the Treasury sold $29 billion in seven-year notes to relatively low demand in the government's final sale of $96 billion in new coupon-bearing debt this week.
Dealers took the largest allocation of seven-year notes since June 2012 as both direct and indirect bidders stepped back, buying their lowest allocations since June and February, respectively. The notes sold at a high yield of 2.106 percent, more than a basis point higher than where they had traded before the auction in the secondary market.
The bid-to-cover was 2.36 times, the weakest since May 2009. Investors have been reluctant to enter new positions in a holiday-shortened week and they also await data next week that will bring new information on the strength of the economy, with Friday's payrolls employment for November the most anticipated release.
Investors are focusing more closely on data as they weigh the odds of when the Federal Reserve is likely to begin paring its $85 billion-a-month bond purchase program.
Many investors expect the Fed will begin tapering in the first quarter of next year if the economy continues its recent momentum.
"The general thought is that if the data continues to come in as good as it does it would move up the prospects of tapering, and I think it would increase the odds of a January taper," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York.