Treasury Department auctions $28B in 7-year notes at a high yield of 1.652%

Bond traders at CME Group
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U.S. government debt prices held higher Thursday following speeches from Federal Reserve officials and strong demand at a Treasury Department auction of seven-year notes.

The yield on the benchmark 10-year Treasury note dipped to 1.829 percent, while the yield on the 30-year Treasury note also slid to 2.643 percent. Two-year yields also fell to trade at 0.867 percent.

The Treasury Department on Thursday sold $28 billion in seven-year notes at a high yield of 1.652 percent. The bid-to-cover ratio, an indicator of demand, was 2.57, in line with the recent average.

Indirect bidders, which include major central banks, were awarded 64.6 percent, versus a recent average of 57 percent. Direct bidders, which include domestic money managers, bought 16.9 percent, compared with a recent average of 14 percent.

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On the data front, initial jobless claims came in at 268,000, below the expected 275,000. Durable goods for April easily beat expectations, rising 3.4 percent.

Pending home rose 5.1 percent, hitting their highest level in a decade.

St. Louis Fed president James Bullard said in a speech Thursday U.S. labor markets are relatively tight and may put upward pressure on inflation, adding there was a divergence between the financial market's expectations for U.S. interest rate rises and the median projections among Fed policymakers.

Fed Governor Jerome Powell said separately Thursday an interest rate hike could be appropriate fairly soon, adding that he supports gradual hikes if data underpin forecasts of an improving economy.

The chances for a June rate hike are about 30 percent, according to the CME Group's FedWatch tool.

—Reuters contributed to this report.