The bond market appeared to ignore the stock rally Thursday as yields hung in the red for most of the session, shrugging off stronger-than-expected economic data.
Traders said prices, which move inversely to yields, have been under immense selling pressure over the last few days, but they are virtually unchanged year to date—a sign that the safe havens are basically tuning out all the noise in the market.
"It's been a fairly quiet few hours in the market. There wasn't much of a reaction to another sizable rally in equities," said Cantor Fitzgerald's Justin Lederer, adding that he expected to see prices hit harder given the recent gains in global stocks.
"It's been a very, very wild ride. We've seen heavy volume trading over the last few days ... the Treasury market has been following other markets for the most part," he said, referring to how bonds have traded off of news related to activity in emerging markets and movements in commodities, stocks and currencies.
Treasury yields hovered near the flat line as the government capped off this week's $90 billion debt offering with a strong seven-year note auction. The Treasury Department auctioned $29 billion in seven-year notes at a high yield of 1.930 percent, the lowest since May. The bid-to-cover ratio, an indicator of demand, was 2.53, compared with a recent average of 2.44.
The benchmark 10-year Treasury note yield gave up earlier gains and was down about 1 basis point at 2.16 percent after the announcement. Seven-year note yields flattened to 1.89 percent and short-term maturities were flat as well.