US Treasurys hold lower after ECB keeps rates unchanged

Traders in the 10-year bond options pit at the Chicago Board of Trade signal orders.
Frank Polich | Reuters

U.S. government debt prices fell on Thursday after the European Central Bank held interest rates steady.

The central bank also extended its quantitative easing program until December 2017, but will reduce purchases to 60 billion euros per month from 80 billion euros.

"You can say that the bank is tapering in a more dovish way," Naeem Aslam, chief market analyst at Think Markets, said in a note. In our view, the upcoming elections in some of the largest economies of the Eurozone will keep the ECB accommodative."

In a news conference, ECB President Mario Draghi said "uncertainty prevails everywhere," but added the risk of deflation has largely disappeared.

The ECB was widely expected to announce it will continue with its massive trillion-euro bond-buying program at its meeting on Thursday, however some analysts were surprised at the details of the announcement.


The yield on the benchmark 10-year Treasury note was higher at 2.3871 percent, while the yield on the 30-year Treasury bond was also higher at 3.0879 percent. Yields move inversely to prices.

In Europe, German sovereign bonds fell, with the German bund gaining around 2 basis points to 0.372 percent, while the 20-year bund yield rose 9 basis points to 0.899 percent.

Back in the U.S., initial jobless claims came in line with expectations.