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US Treasury yields dip after strong auction, data

Bond traders at CME Group
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U.S. Treasury yields slid on Thursday following strong demand at a seven-year note auction and after key economic data.

The yield on the benchmark 10-year Treasury note dipped to 1.825 percent, while the yield on the 30-year Treasury bond ticked lower to 2.684 percent.

The 2-year note yield fell to 0.774 percent.

Investors reacted to the note sale and the Fed's decision to keep rates on hold. They also digested two key economic data sets.

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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The Treasury Department on Thursday sold $28 billion in seven-year notes at a high-yield of 1.634 percent, the highest since January. The bid-to-cover ratio, an indicator of demand, was 2.65, compared with a recent average of 2.47.

Indirect bidders, which include major central banks, were awarded 65.5 percent, versus a recent average of 57 percent. Direct bidders, which include domestic money managers, bought 14.2 percent, against a recent average of 13 percent.

Gross domestic product increased at a 0.5 percent annual rate in the first quarter, the slowest since the same period in 2014, the Labor Department said on Thursday in its advance estimate. Businesses doubled down on efforts to reduce unwanted merchandise clogging up warehouses.

The economy was also blindsided by cheap oil, which has hurt the profits of oil field companies like Schlumberger and Halliburton, resulting in business spending contracting at its fastest pace since the second quarter of 2009, when the recession was ending.

Economists polled by Reuters had forecast the economy expanding at a 0.7 percent rate in the first quarter. The economy grew at a 1.4 percent pace in the fourth quarter.

On Wednesday, the Fed stuck to its message that it would be slow to raise rates, so economic data will be keenly eyed to frame expectations of when it might raise them again.

—CNBC's Patti Domm contributed to this report