US Treasury yields higher after 7-year notes sale

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U.S. government prices were sharply lower after the Treasury Department auctioned $29 billion in seven-year notes at a high yield of 1.885 percent on Thursday.

The bid-to-cover ratio, an indicator of demand, was 2.55.

Indirect bidders, which include major central banks, were awarded 62.3 percent, lower than at September's seven-year sale. Direct bidders, which include domestic money managers, brought 14 percent, higher than at September's sale.

The yield on the benchmark 10-year Treasury note was higher at 2.1745, after closing at 2.092 percent.

The yield on the 30-year Treasury bond was higher, at 2.9635 percent, after closing at 2.865 percent.

Two-year yields also built on Wednesday's gains, trading at 0.7236 percent.


Investors also reacted to the Federal Reserve's decision to keep interest rates unchanged and digested the release of third-quarter GDP (gross domestic product) and weekly jobless claims.

Third-quarter GDP came in at an annualized rate of 1.5 percent, below the expected 1.6 percent. Jobless claims rose marginally to 260,000 and the four-week average held at its lowest since 1973.

Other data included the the National Association of Realtors (NAR) Pending Home Sales Index, which saw pending home sales drop 2.3 percent in September.

Wednesday saw prices pare losses following the Fed's announcement.

The Fed on Wednesday issued a surprisingly hawkish post-meeting statement, commenting specifically that it will be looking for progress in employment and labor when considering a rate hike at its December meeting.

The fact the central bank specifically mentioned its next meeting immediately triggered a significant move up in market expectations for a Fed rate rise this year.

In oil markets, Brent crude traded at around $48.46 a barrel, down 1.16 percent, while U.S. crude was at around $45.51 a barrel, down 0.96 percent.

—CNBC's Patti Domm contributed to this report