Treasury yields rise after Draghi comments
NEW YORK (MarketWatch) -- Treasury prices declined on Thursday, pushing yields up further from record lows, after European Central Bank President Mario Draghi vowed the bank would take any necessary steps to save the euro, boosting investors' willingness to shift into riskier assets like stocks.
Yields on 10-year notes (10_YEAR) , which move inversely to prices, rose 3 basis points to 1.43%, after touching a record low in the previous session. A basis point is one one-hundredth of a percentage point.
Yields on 30-year bonds (30_YEAR) increased 3 basis points to 2.49%. Their all-time low was 2.445%.
Yields on 5-year debt (5_YEAR) added 2 basis points to 0.58%, while the record low was 0.535%.
At an investor conference, Draghi also said that addressing high yields in euro-area sovereign debt comes within the central bank's mandate, noted bond strategists at RBS Securities.
"It's yet another day when Treasury yields are being buffeted by headlines out of Europe," they wrote in a note. "It's nothing new in Treasuryland, where we remain captive to the whim of politicians in Europe and here at home, too."
Treasurys slipped a little more after a pair of reports showed first-time U.S. jobless claims fell more than forecast in the latest week and orders for durable goods improved more than forecast in June. See more on jobless claims.Read about durable goods.
"We're not worried about interest rates rising in the near term while the economy remains so sluggish," said Jeff Layman, chief investment officer at BKD Wealth Advisors in Springfield, MO.
Bonds stayed down after the government auctioned $29 billion in 7-year notes (7_YEAR) at 0.954% -- the lowest yield on record.
Bidders offered to buy 2.64 times the amount of debt sold, compared to an average of 2.75 times at the last four auctions, according to CRT Capital Group.
Indirect bidders, a group which includes foreign central banks, bought 46.3%, versus an average of 41.4%.
Direct bidders, a group which includes domestic money managers, purchased another 7.1%, compared with 13.3%.
"The low level of yields likely kept some investors away from the auction," bond strategists at Nomura Securities said.
It's the last of three major note auctions this week. The U.S. already sold 2-year and 5-year notes this week, with only tepid demand seen for the securities. Read about Treasurys, 5-year auction.