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US Treasury yields off highs after 30-year tops 3%

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Scott Olson | Getty Images

U.S. Treasurys prices rose on Thursday, getting a lift from weak global equity markets and breaking a long slide in prices that had pushed yields on 30-year bonds to more than 3 percent for the first time this year.

Gains were best among long maturities, with prices for 30-year Treasurys jumping more than 1 full point as European bond yields eased from peaks reached earlier in the day.

The MSCI world equity index, which tracks shares in 45 nations, was off 0.28 percent, while Wall Street traded higher after a weak opening.

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"We are seeing a bit of a risk-off trade in equities that is translated into some buying of Treasurys," said Donald Ellenberger, strategist and portfolio manager at Federated Investors in Pittsburgh.

Pull-backs in German and other European government bond yields from early peaks were also likely benefiting Treasurys, Ellenberger said.

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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Yields on benchmark German 10-year Bunds went as high 0.796 percent on Thursday before easing to 0.606 percent as a worldwide bond market rout moderated.

"That could be a near-term peak in German yields," Ellenberger said. "If that is a signal Bunds are going to stabilize in the near term, that would be another reason to take some pressure off the long end of our market."

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Treasurys also benefited from Japanese investors returning to the market after a holiday and the absence of big bond deals by Apple Inc and others, which had prompted selling of Treasurys earlier this week, according to traders.

The 10-year note yields were last at 2.17 percent, down about 3 basis points on the day. The 30-year's yield was 2.90 percent, off an earlier high of 3.038 percent.

Treasurys reacted little to government data showing the number of Americans filing new claims for unemployment benefits rose marginally last week, staying near a 15-year low.

The data signaled a continued strengthening in the U.S. jobs market ahead of Friday's April employment report, which often drives big price changes in bonds and could be critical to Federal Reserve policymakers readying to end an era of near-zero interest rates.

"If we continue to see the employment rate go down, that could pull forward the beginning of the Fed tightening cycle," Ellenberger said.