* Strong euro zone CPI, Chicago PMI data pull on prices
* Revised U.S. 4th-quarter GDP growth caps bond losses
* Fed bought $1.25 bln in notes maturing in 2038-2043
By Marina Lopes
NEW YORK, Feb 28 U.S. Treasury debt prices pared
most of their losses on month-end buying on Friday, as investors
balanced their portfolios, traders said.
Prices had fallen earlier in the session as
stronger-than-expected economic data led to profit-taking.
A report on Friday showed the pace of business activity in
the U.S. Midwest rose slightly in February, beating expectations
and snapping a three-month run of slower growth.
Separately, data showed inflation in the euro zone
unexpectedly held steady this month, cooling expectations the
European Central Bank might ease monetary policy as early as
next week, further pressuring Treasuries.
"The month-end extension is fairly large for Treasuries this
month. Given the performance you've seen in the equity markets
hitting new highs, my guess is that the balanced funds need to
take profits in stocks and buy some Treasuries," said Sean
Murphy, a Treasuries trader at Societe Generale in New York.
A big downward revision of the U.S. government's estimate of
fourth-quarter growth, due to weak consumer spending and
exports, also limited losses.
Benchmark 10-year note yields rose to a session high of
2.6980 and the market was on track for its biggest weekly loss
in over one month.
Ten-year notes were down 5/32 in price, sending
yields up to 2.660 percent, from Thursday's close of 2.642.
Thirty-year bonds were down 2/32, pulling yields up
to 3.598 percent from Thursday's close of 3.596 percent.
Traders predict yields will remain bound in the 2.65 percent
to 2.76 percent range as investors wait for the payrolls report
The Fed bought $1.25 billion in treasury notes maturing
between 2038 and 2043.