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US Treasurys edge higher as stock rally pauses

Traders in the 10-year bond options pit at the Chicago Board of Trade signal orders.
Frank Polich | Reuters
Traders in the 10-year bond options pit at the Chicago Board of Trade signal orders.

U.S. government debt prices were higher on Thursday as equities declined, while investors focused on a slew of economic data reports.

The yield on the benchmark 10-year Treasury notes, which moves inversely to price, was lower at around 2.452 percent, while the yield on the 30-year Treasury bond was also lower at 3.054 percent.

Stocks fell Thursday after posting five straight days of record closing highs.

Treasurys have held within their recent range even as investors prepare for the potential for three rate hikes this year, with 10-year notes trading between 2.31 percent and 2.52 percent since the beginning of the year.

"It seems like there is an underlying bid in that 2.50 (percent) area in 10-year notes," said Dan
Mulholland, head of Treasury trading at Credit Agricole. A rally in German government bonds also helped support U.S. Treasuries on Thursday, while a weaker dollar boosted the bonds.

"We've been following the dollar index kind of tick for tick. When the dollar strengthens U.S. Treasuries sell-off when they dollar weakens they rally," said Mulholland.

On the data front, housing starts fell 2.6 percent last month. Meanwhile, initial jobless claims came in at 239,000, while the Philadelphia Federal Reserve index reaching its highest level since 1984 at 43.3.

Symbol
Yield
 
Change
%Change
US 3-MO
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US 1-YR
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US 2-YR
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US 5-YR
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US 10-YR
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US 30-YR
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In oil markets, Brent crude traded at $55.83 a barrel on Thursday, up 0.14 percent, while U.S. crude was around $53.48 a barrel, up 0.70 percent.

Significant gains in oil prices appeared to be capped by rising fuel inventories and crude production levels in the U.S. earlier in the trading day.

—Reuters contributed to this report.