By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices erased a small advance Friday after a report said the U.S. grew at a faster pace in the fourth quarter than previously estimated.
Bond yields, which move inversely to prices, have been in a tight range lately as investors remain positioned for bonds to fall further. Equities have performed well even in light of a deteriorating debt situation in Europe and problems in Japan and Libya.
Yields on 10-year notes (UST10Y 3.40, -0.01, -0.24%) slipped to 3.38% before the data, then reversed to sit little changed at 3.41%.
Yields on 2-year notes (UST2YR 0.70, +0.00, +0.58%) traded nearly flat at 0.70%.
Thirty-year bond yields (UST30Y 4.47, -0.02, -0.40%) stayed down by 2 basis points at 4.47%. A basis point is 1/100th of a percent.
The Commerce Department said U.S. gross domestic product grew at a 3.1% pace in the fourth quarter, up from an earlier estimate of a 2.8% pace. Read story on GDP.
Still to come are speeches from a handful of Federal Reserve officials, data on consumer confidence and a Fed buyback of debt.
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Traders may already be preparing for next week’s trio of U.S. auctions, which often entails selling current holdings of a maturity to be auctioned to get a better price on the newer, more liquid securities.
Also, late next week, the U.S. will release its monthly employment report, always one of the most closely watched economic reports.
“The result of that somewhatbearish price action in the face of bullish news leaves us believing that the market is focused on supply concessions and the nonfarm-payrolls setup for next week,” said George Goncalves, a bond strategist at Nomura Securities.
On Thursday, Treasury yields rose as investors shrugged off seemingly negative news around the world and favored stocks and commodities.
