U.S. Treasury prices fell on Thursday, undermined by aggressive expansionary monetary policy measures from the European Central Bank, including a cut in benchmark interest rates to fresh record lows that negatively impacted inflation sensitive assets.
"One of the main reasons we are down here is because of Europe. The fact that the ECB is taking aggressive action to tackle its own maladies is likely to help risk markets in the U.S. such as equities and hurt bond markets," said Aaron Kohli, interest rate strategist at BNP Paribas in New York.
Kohli also pointed toward a calendar full of upcoming new issuance by U.S. corporate and government debt for some portion of the weakness.
The Institute for Supply Management said its services index rose to 59.6 in August—its highest level in nine years—from 58.7 in the previous month. Economists had expected a reading of 57.5, according to a Reuters survey.