Bonds prices whipsawed on Wednesday after the U.S. government's auction of 30-year Treasury bonds, the second of three debt auctions this week, saw decent demand.
The Treasury Department auctioned $13 billion in 30-year bonds at a high yield of 3.074 percent. The bid-to-cover ratio, an indicator of demand, was 2.40, not far from the 2.45 recent average, but lower than September's 2.67.
Indirect bidders, which include major central banks, were awarded 46.2 percent, while direct bidders, which includes domestic money managers, took 21.5 percent of the offer.
U.S. Treasurys turned lower earlier after wholesale trade data topped forecast and monthly jobless claims hit an eight-year low, underscoring an economic recovery that is key to convincing the Federal Reserve to raise interest rates.
U.S. wholesale inventories rose 0.7 percent in August, versus expectations for 0.3 percent gain, while jobless claims dropped fell 287,000 last week, compared to estimates for a rise to 294,000.
Benchmark 10-year Treasury notes fell 2/32 in price and yielded 2.33 percent, down modestly from Wednesday's close.
U.S. 30-year bonds lost 8/32 in price with the yield at 3.07 percent, after touching a one-year low earlier.
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Two-year notes rose on Thursday, building on Wednesday's gains after the release of the Federal Reserve's dovish minutes from September.
"To say these minutes were dovish is, based on the equity market reaction, an understatement… These minutes serve to further shut down those calling for a hike in 2015's first four months," Dan Greenhaus, a strategist at BTIG, said in a morning note.
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The minutes showed the Fed had cut its growth forecasts due to the higher dollar, with a number of Federal Open Market Committee (FOMC) members expressing concerns about global economic weakness.
Reuters contributed to this copy.