Treasurys rise as ECB reduces growth forecasts



U.S. Treasurys prices rose on Thursday after the euro zone's chief central banker said policymakers will decide early next year if the slowing region needs more economic stimulus.

Prices of 30-year Treasurys, which had been stung early this week by investors positioning for a flurry of high-quality corporate debt offerings, increased 15/32. Long bonds were last yielding 2.966 percent, according to Reuters data.

European Central Bank President Mario Draghi told reporters in Frankfurt that the ECB's Governing Council was unanimous in backing such potential steps as a government bond-buying program with new money.

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The ECB also cut its 2015 economic growth and inflation forecasts and kept borrowing costs at record lows.

New forecasts by ECB staff sharply downgraded the euro zone's growth outlook for next year to 1.0 percent from the 1.6 percent predicted in September.

Treasurys rallied strongly in November in part on buying by investors worried about a slowing global economy.

Treasurys initially rose on the ECB's actions and Draghi's comments but then slipped as investor reassessed the timing and likelihood of new euro zone stimulus, according to Wilmer Stith, fixed income portfolio manager at Wilmington Trust in Baltimore, Maryland.

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"They have a lot of political wood to chop to get the kind of quantitative easing program the market has been bidding for," Stith said.

Treasurys also got a short-lived lift from a decline in U.S. weekly jobless claims that reinforced expectations of a strong U.S. jobs report on Friday, according to Kim Rupert, managing director at Action Economics in San Francisco.

Economists polled by Reuters predict the November unemployment rate at 5.8 percent, unchanged from October.

The benchmark 10-year Treasury was last up 3/32 to yield 2.27 percent. Shorter maturities were mostly flat or little changed.