Bond prices edge lower on positive housing, factory data

Hold Treasurys despite low yields: Marc Faber

U.S. Treasurys prices edged lower on Thursday after positive U.S. economic data on existing home sales and factory activity lifted sentiment, while larger-than-expected weekly jobless claims failed to spur safe-haven bids.

The National Association of Realtors said existing home sales increased 1.3 percent to an annual rate of 4.65 million units in April, marking the second increase in sales in nine months.

Financial data firm Markit, meanwhile, said its preliminary or "flash" U.S. Manufacturing Purchasing Managers Index rose to 56.2 in May from 55.4 in April.

"I don't think any of the data this morning was that much of a surprise," said Brian Rehling, chief fixed-income strategist at Wells Fargo Advisors in St. Louis. He said the lack of downside surprises kept Treasuries prices slightly lower.


Rehling also said that traders were reevaluating after last week's strong rally in medium and long-term Treasuries and reluctant to push prices higher.

Data showed the number of Americans filing new claims for unemployment benefits were up 28,000 at 326,000 in the week ended May 17, above the 310,000 forecast but still near a seven-year low, pointing to ongoing healing in the labor market.

"The data was a bit worse than expected, but certainly not dramatic," said Lou Brien, market strategist at DRW Trading in Chicago. He said the data did not prompt safe-haven bids for Treasurys.

Read MoreCNBC explains: Bonds and rates

Prices on 30-year Treasury bonds were down 15/32 in price to yield 3.29 percent, their lowest since June 17, 2013. Benchmark 10-year Treasury notes were last down 6/32 in price to yield 2.56 percent, from 2.536 percent late Wednesday.

Prices on 7-year Treasurys notes were last down 5/32 to yield 2.085 percent, from 2.09 percent late Wednesday.

Traders also said slight gains in U.S. stocks hurt safe-haven buying of Treasurys. The benchmark S&P 500 stock index was last up 0.19 percent.