NEW YORK (MarketWatch) — Treasury prices climbed on Thursday as investors stepped back into the government debt market after the recent selloff, pushing the benchmark 10-year Treasury yield back below 3%.
/quotes/zigman/4868283/delayed 10_YEAR 2.98, -0.05, -1.68% 10-year Treasury yield
The 10-year (10_YEAR) yield, which falls as prices rise, fell 2.5 basis points to 2.982%, according to Tradeweb. The benchmark yield closed above the 3% threshold last week for the first time since July of 2011.
The 30-year bond (30_YEAR) yield fell 3 basis points to 3.913%, while the 5-year note (5_YEAR) yield fell 2 basis points to 1.718%.
However, trading remained thin as market participants were slow to return to their offices after the holidays.
"The move in rates has not been on particularly high volume," said Ira Jersey, interest-rate strategist with Credit Suisse Group AG. "Some people came in, saw [10-year] yields over 3% and saw that there was some decent value."
Thursday saw a number of data releases. The ISM manufacturing index had a reading of 57% in December, down from a two-and-a-half year high of 57.3% in November. Nonetheless, the data beat expectations of MarketWatch-polled economists, who projected a 56.6% reading. Any reading over 50% indicates expansion.
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Another gauge of manufacturing, the U.S. Markit PMI, hit an 11-month high in December.
The number of people applying for unemployment benefits dropped by 2,000 to hit 339,000 last week, though the data are often skewed by the holiday season. Construction spending rose 1% in November.
Treasury yields have been mostly rising in recent sessions, following a decision last month by the Federal Reserve to begin scaling back the pace of its bond-buying stimulus program. That sent Treasurys to their worst annual losses since 2009, and the broader market to its worst losses since 1994, according to Barclays data.
"Sentiment and positioning data suggest that most investors yearn for higher rates while momentum studies also have crossed deeply into oversold territory for most Treasury benchmarks," said Gabriel Mann, market strategist at RBS, in a note.
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