Treasuries traded in the tightest range in almost a month after reports showed U.S. companies expanded hiring at a slower-than-forecast pace and a services- industry index declined more than projected, adding to speculation that economic growth is stalling.
Treasuries climbed for a second day as the U.S. auctioned $35 billion in five-year notes to stronger-than average demand amid concern harsh weather may be masking a fundamental slowdown in the economy.
Treasuries fell, pushing 10-year note yields to a two-week high, as the U.S. sold $24 billion of the securities a day after Federal Reserve Chairman Janet Yellen said the central bank remains on course to taper bond purchases.
The U.S. auction of $24 billion of 10-year notes drew the largest share since June of bidders from an investor class that includes foreign central banks as a back- up in yields and concern economic growth is uneven fueled demand for safety.
Treasuries headed for the first monthly decline since August as reports of increased economic growth spurred speculation the Federal Reserve may vote to begin to reduce its bond purchases at a December policy meeting.
Risk appetites in American capital markets diminished amid the U.S. budget impasse, pushing Treasury one-month bill rates to the highest since 2008 and Internet stocks to the biggest losses in two years.
Treasury 10-year notes advanced for a fifth day, the longest streak of gains in almost a year, on speculation low inflation will give the Federal Reserve more flexibility in winding down its government bond-buying program.
Treasuries rose as 10-year note yields at almost the highest levels in eight weeks attracted buyers as Janet Yellen said the U.S. economy must improve before the Federal Reserve can begin slowing bond purchases.