Thirty-year Treasurys sat out a modest U.S. bond market rally and dropped on Thursday after the government sold $16 billion of new long bonds at unexpectedly high yields.
The 30-year auction, the last of three this week by the Treasury Department selling $69 billion of new debt, came with a high yield of 3.440 percent, or over two basis points more than the market level signaled just before the auction.
Viewed as a possible bellwether by many traders, the auction had a bid-to-cover ratio of 2.09, the lowest since an August 2011 auction and below a recent 2.36 average. Its high yield was the lowest since last June.
"The auction was weak," said strategist Ian Lyngen at CRT Capital in Stamford, Connecticut.
Yields on U.S. 30-year bonds, which on Friday touched their weakest level since June 19 at 3.34 percent, traded at 3.436 percent after touching a high of 3.438 percent. For the day, the 30-year was down 20/32 in price.
Ten-year Treasury notes were flat in price at 2.618 percent.