NEW YORK (MarketWatch) -- Treasury prices rose on Thursday, pushing yields down, as renewed uncertainty about policy actions in Europe and the impact on global economic growth weighed on the euro and U.S. stock futures, increasing the relative attractiveness of U.S. debt.
Bonds extended gains after an unexpectedly weak reading on initial unemployment claims in the U.S
Yields on 10-year notes(UST10Y 3.27, -0.10, -2.10%), which move inversely to prices, fell 10 basis points to 3.3%.
A basis point is 0.01%.
Yields on 2-year notes declined 6 basis points to 0.7%.
Longer-term yields falling more than shorter-term ones reduces the gap between the securities, flattening the so-called "yield curve" that charts the spread between them.
"We start this day with very little new to add to the story as we watch the euro, stocks, and take a bullish flattening cue from that," said strategist at CRT Capital Group.
The euro(CUR_EURUSD 1.2360, -0.0066, -0.5311%)slipped to $1.2322 from $1.2429 in late North American trading Wednesday.
It fell to a fresh four-year low earlier this week. Read about dollar, euro.
The Labor Department said 471,000 Americans filed first-time claims for jobless benefits, unexpectedly jumping 25,000.Read about jobless claims.
Still to come is the Philadelphia Federal Reserve's index on manufacturing for May and the leading indicators index for April, both at 10 a.m. Eastern time.
At 11 a.m., the Treasury Department will say how much in debt it will sell next week. Analysts expect auction sizes to shrink.
The government will sell $2 billion less than last month in 2-year and 5-year notes, and $1 billion less in 7-year debt next week, according to Nomura Securities.
The size cuts, focused in shorter-maturity debt, should help the Treasury meet two goals: extend the average maturity of the government's debt and reduce the risks associated with refinancing the debt in upcoming years, said George Goncalves, a bond strategist at Nomura.
On Wednesday, Treasury prices fell and the euro recouped some steep loses as currency traders reversed bets that the shared currency would fall further.
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