US Treasury yields rise after GDP data
U.S. Treasury prices continued to edge lower on Thursday after US growth came in just slightly below expectations.
The advanced reading of second-quarter gross domestic product (GDP) was 2.3 percent versus a 2.6 percent. First-quarter growth was also revised to growth of 0.6 percent from a prior reading of a 0.2 percent decline.
Yields the benchmark 10-year Treasury (U.S.: US10Y) hit 2.319 percent after the data was released while two-year note yields extended earlier gains, rising 4.3 basis point to 0.7472 percent.
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Analysts polled by Reuters forecast GDP rose at a 2.6 percent annual rate in the second quarter. First quarter GDP fell 0.2 percent, but this number is expected to be revised higher.
Read More Earnings a focus, but also looking to GDP for Fed clues
Treasury yields, which move in the opposite direction prices, rose on Wednesday after the U.S. Federal Reserve ended a two-day meeting and said economic conditions were improving after a slowdown in the first quarter - reinforcing expectations for a rate rise in September.
"The fact that we have two data cycles before the 17 September meeting with two payrolls, CPI (consumer price index) and retail sales prints, is still supporting the September probability, implying significant event risk to these releases," analysts at Societe Generale said in an note.
"This will make for an interesting summer, where data dependence will indeed be key. Already our economists are looking for a strong Q2 GDP today, at 3.3 percent, exposing Treasuries to (small) losses," they added.
Elsewhere, the U.S. Treasury is expected to auction 7-year notes later this session. The sale follows auctions of two-year and five-year paper earlier this week.
"Next on the calendar is the auction of $29 billion in 7-year notes today. We switch our view towards a slight positive bias on the upcoming 7-year auction on the back of the strength seen in the 5-year supply," Societe Generale said.
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