By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices erased gains on Thursday after a trio of economic reports came in better than forecast, giving investors reason for optimism to move away from the safe-haven status of U.S. debt.
Yields on 10-year notes 10_YEAR +1.30% , which move inversely to prices, stood at 1.95%, off a low about 1.91%, which was their lowest in about two weeks. A basis point is one one-hundredth of a percentage point.
Thirty-year bond yields 30_YEAR +0.42% turned up 1 basis point to 3.00%.
Five-year note yields 5_YEAR +3.41% rose 1 basis point to 0.81%.
Treasurys pared gains after the Labor Department said initial jobless claims unexpectedly fell to 348,000 last week. Read more on first-time claims falling to the lowest in nearly four years.
Separately, the producer price index for January rose 0.1% — less than forecast — and housing starts rose at a faster pace than predicted for the first month of 2012. S ee more on PPI.
Before the data, investors sought out Treasurys as tensions between Greece and its European partners rose after euro-zone officials continued to question the commitment of the country’s political leaders to austerity measures. See story on Greece, Europe. Read about housing starts.
The next deadline for an agreement is Monday’s meeting of European Union finance ministers in Brussels.
“The flight-to-quality flows aided by the global uncertainties have clearly been to the benefit of Treasurys and kept 10-year yields anchored well below the 2% level,” said David Ader and Ian Lyngen, bond strategists at CRT Capital Group.
“With the Monday meeting of the EU finance ministers still targeted for a ‘resolution’ to this Greek default crisis, there remains ample opportunity for officials to spook or assure the markets as they attempt to manage expectations.”
Bonds have gained a modicum of support every time comments from or actions by European or Greek politicians detract from hopes that Greece will obtain what would be its second bailout in time to avoid default. See Wednesday’s Bond Report.
Also Thursday, the Treasury Department will announce how much U.S. debt it will auction next week.
Analysts expect auction sizes to remain the same size as last month’s: $35 billion each in 2-year 2_YEAR +4.38% and 5-year notes as well as $29 billion in 7-year notes 7_YEAR +2.10% .
