* Traders mull Yellen comments
* U.S. initial jobless claims rose 5,000 last week
* U.S. home resales fell 0.4 pct in Feb.
By Sam Forgione
NEW YORK, March 20 U.S. Treasuries prices were
roughly unchanged on Thursday a day after Federal Reserve Chair
Janet Yellen spooked traders by signaling the U.S. central
bank's policy-makers may start raising interest rates sooner
Speaking at a press conference after the Fed's two day
policy meeting, Yellen said the Fed could raise rates six months
after its current bond-buying program ends, which spurred
selling on fears of a sooner-than-expected move away from the
central bank's near-zero rate policy.
"The big move, for now, is over," said Dion Chu, U.S.
Treasury trader at Jefferies & Co. in New York, in reference to
the 16 basis-point rise in the five-year note's yield
and the 9 basis-point rise in the benchmark 10-year Treasury
yield on Wednesday.
While most Treasuries yields were little changed from
Wednesday's levels, short-term interest rates continued to rise
modestly on Thursday in the wake of Yellen's comments. Yellen
said the Fed will probably end its massive asset purchase
program this fall.
The 3-year U.S. Treasury note was last down 2/32 in price to
yield 0.90 percent, compared to a yield of 0.88 percent late
Wednesday. The yield on the 5-year Treasury note was last at
1.72 percent, up from 1.70 percent late Wednesday.
The second day of selling pressure on short-dated bonds
showed the continued impact of Yellen's comments on raising
rates, said Justin Hoogendoorn, fixed income strategist at BMO
Capital Markets in Chicago.
The rise in the five-year note's yield to 1.71 percent on
Wednesday was the largest one-day rise since July 2013. Bond
yields move inversely to their prices.
Traders on Thursday largely shrugged off Labor Department
data showing initial claims for state unemployment benefits
increased by 5,000 last week, which was lower than expected and
pointed to some underlying strength in the labor market.
The stronger-than-expected data was not likely to change Fed
policy, said Chu of Jefferies, given that weak U.S. economic
data since the start of 2014 has had little impact on the
central bank's decision-making.
Data on U.S. existing home sales also had little impact on
Treasuries prices. The National Association of Realtors said
U.S. home resales dropped 0.4 percent in February to an annual
rate of 4.60 million units, a 19-month low but in line with
"It certainly is a continuation of a cooling of the housing
market," said Hoogendoorn of BMO. He said last year's rise in
U.S. interest rates on fears of a pullback in the Fed's
bond-buying program has continued to weaken the housing market.
The Philadelphia Federal Reserve Bank said its business
activity index rose to 9.0 in March from -6.3 in February,
topping economists' expectations for 3.8, according to a Reuters
poll. The data had a muted impact on Treasuries prices, however.
The benchmark 10-year U.S. Treasury note was last down 1/32
to yield 2.78 percent, showing little change from late
Wednesday, when the yield was at 2.77 percent.
The 30-year Treasury bond, meanwhile, was last
up 9/32 in price to yield 3.65 percent, down from 3.67 percent
late on Wednesday.
(Reporting by Sam Forgione; Editing by Chris Reese)