TREASURIES-Bond prices edge lower on stronger U.S. housing, factory data
* April existing home sales up 1.3 pct * Manufacturing grows more than expected in May * Weekly jobless claims close to seven-year low * Treasury sells $13 bln in 10-yr TIPS to solid demand (Updates prices, adds new comments) By Sam Forgione NEW YORK, May 22 (Reuters) - U.S. Treasuries prices edged lower on Thursday after stronger economic data on U.S. existing home sales and factory activity lifted sentiment, while larger-than-expected weekly jobless claims failed to spur safe-haven bids. The National Association of Realtors said existing home sales increased 1.3 percent to an annual rate of 4.65 million units in April, marking the second sales increase in nine months. Financial data firm Markit, meanwhile, said its preliminary or "flash" U.S. Manufacturing Purchasing Managers Index rose to 56.2 in May from 55.4 in April. Economists polled by Reuters expected a reading of 55.5. "To justify a further fall in yields, we would need to see worse economic data," said Anthony Valeri, market strategist at LPL Financial in San Diego. Data showed the number of Americans filing new claims for unemployment benefits was up 28,000 at 326,000 in the week ended May 17, above the 310,000 forecast but still near a seven-year low, pointing to ongoing healing in the labor market. Prices on 30-year Treasury bonds were last down 6/32 to yield 3.427 percent, from a yield of 3.416 percent late Wednesday. Benchmark 10-year Treasury notes were last down 4/32 in price to yield 2.5517 percent, from 2.536 percent late Wednesday. Two-year Treasury notes last traded roughly flat, to yield 0.346 percent, from 0.339 percent late Wednesday. Traders also digested minutes from the Federal Reserve's April policy meeting released Wednesday, which suggested that the central bank was in no hurry to raise interest rates. By purchasing $45 billion in bonds per month while keeping interest rates low, the Fed is injecting liquidity into the economy and generating greater expectations of inflation, which pushes up yields on longer-dated bonds, noted Jonathan Lewis, chief investment officer at Samson Capital Advisors in New York. The U.S. Treasury sold $13 billion in 9-3/4 inflation-indexed notes on Thursday. Indirect bidders, which include foreign central banks, bought a record high share of the notes, according to analysts. The Fed bought $0.97 billion in Treasuries maturing between November 2039 and August 2043 as part of its ongoing purchases, which had a muted impact on Treasuries prices. Traders also said slight gains in U.S. stocks weighed on Treasuries prices. The benchmark S&P 500 stock index was last up 0.24 percent. (Reporting by Sam Forgione; Editing by Tom Brown and Dan Grebler)
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