After turning lower over the course of the previous session, treasuries moved back to the upside during trading on Thursday, although buying interest was subdued.
Bond prices moved modestly higher in early trading and maintained a positive bias for much of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.5 basis points to 1.888 percent.
The modest strength among treasuries came on the heels of the release of a Commerce Department report showing that the U.S. economy grew by less than expected in the fourth quarter of 2012.
While the report said fourth quarter GDP was upwardly revised to show a 0.1 percent increase compared to the previously reported 0.1 percent drop, economists had been expecting the revised report to show 0.5 percent growth.
Meanwhile, bond traders largely shrugged off upbeat reports on weekly jobless claims and Chicago-area business activity.
Uncertainty about the impact of the automatic spending cuts due to go into effect on Friday also increased the appeal of treasuries.
Unless Congress acts, approximately $85 billion in automatic cuts to both defense and domestic spending are due to go into effect
While President Barack Obama is scheduled to meet with Congressional leaders from both parties on Friday, the so-called sequester is not expected to be averted.
A slew of economic data is also scheduled to be released on Friday, with traders likely to keep an eye on reports on manufacturing activity, personal income and spending, and construction spending.
by RTT Staff Writer
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