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Treasury yields stabilize after market selloff

U.S. Treasurys yields were little changed on Thursday with benchmark yields hovering near 3-1/2 week highs after a broad selloff in Treasurys, German Bunds and British Gilts on Wednesday.

Analysts blamed the market downdraft on a combination of factors, including a perceived hawkish tilt in the minutes of the Bank of England's previous meeting as well as investors paring heavy holdings in Bunds due to the European Central Bank's bond purchase programs, and concerns about Greece striking a deal with its creditors.

With liquidity remaining poor, investors were reluctant to jump back into bonds.

"A lot of people were caught off guard by the selloff yesterday. No one is willing to take big positions right now," said Gennadiy Goldberg, interest rate strategist at TD Securities in New York.

Benchmark U.S. 10-year Treasury note yields were flat at 1.976 percent after hitting 1.993 percent on Wednesday, which was the highest in 3-1/2 weeks, according to Reuters data. The 30-year bond yield was unchanged at 2.66 percent, a day after reaching 2.679 percent, the highest in five weeks.

Treasurys yields fell in early action on data that showed slowing factory activity in Europe and Asia, supporting the view of a global economy that requires more central bank stimulus rather than less. Uneasiness about Greece limited yield rises. German Chancellor Angela Merkel was expected to push Greek Prime Minister Alexis Tsipras on Thursday to move faster to agree to detailed economic reforms that are crucial to unlocking more aid before Athens runs out of cash.

As U.S. businesses have blamed a strong dollar for hurting exports and profits, domestic labor conditions signaled ongoing jobs growth. The number of Americans filing for first-time jobless benefits rose unexpectedly last week by 1,000 to 295,000, but the underlying trend was seen consistent with employers hiring more workers.

On the supply front, the Treasury Department will sell $18 billion of five-year Treasury Inflation-Protected Securities at 1 p.m. EDT (1700 GMT). This type of U.S. government bond has fared better than regular Treasurys in April as oil prices have stabilized and data suggest domestic inflation might climb toward the Federal Reserve's 2 percent target later this year.

TIPS has earned a 0.68 percent return so far this month, compared with a 0.20 percent loss among nominal Treasurys, according to indexes compiled by Barclays.

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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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