Bonds Pare Early Losses

U.S. Treasuries trimmed the early losses seen on the first batch of a rush of economic data Thursday with the mid-curve outperforming. The upside surprise on the final Q3 gross domestic product was tempered by the unexpected jump in weekly jobless claims. November personal income and spending reads both missed expectations as did the leading indicators report. Treasury has an inflation-related mid-curve auction on deck, with participants pinning hopes on the support of foreign buyers.

The 30-year recently traded 3.129% from a high yield/low price at 3.1473% behind the GDP data and a 3.12% close Wednesday. The 10-year is near 2.55% having hit a low of 2.5757% from 2.545% Wednesday. The five-year has stalled near 2.02% versus a 2.054% low and 2.0255% close. The two-year is near 1.20% after a drop to 1.229% and 1.196% Wednesday.

The curve trade wound along a steeper slope with the yield gap between the two- and 10-years widening to 1.36 from 1.35, maintaining levels last seen in November 2015. The yield spread between the five- and 30-years steepened to 1.10 plus from 1.09 Wednesday.

By Stephen Holmes