* Benchmark yields fall to lowest level in about four weeks
* FOMC minutes underpin bids for bonds, stock loss adds
* Latest 30-year bond supply fetches lowest yield since June
* U.S. weekly jobless claims near seven-year low
(Updates market action, adds quotes)
By Richard Leong
NEW YORK, April 10 The U.S. Treasuries market
rallied on Thursday with benchmark yields falling to their
lowest in nearly four weeks as market-friendly minutes from the
Federal Reserve's March policy meeting renewed appetite for
A steep selloff on Wall Street, where the major indexes lost
between 1 and 3 percent, ramped up safe-haven bids for
Treasuries and stoked demand at a $13 billion 30-year bond
auction that fetched the lowest yield in 10 months.
The latest Federal Open Market Committee minutes, released
on Wednesday, suggested most policy-makers wanted to cling to a
near-zero rate policy they adopted in December 2008 until the
U.S. economy creates more jobs and an inflation rate that
achieves its 2 percent target, investors said.
"(The minutes) were very dovish. We are going to see low
rates in the foreseeable future," said Jill King, senior
portfolio manager at Horizon Cash Management LLC in Chicago.
It was longer-dated Treasuries' turn to shine a day after
they lagged shorter maturities that gained on the FOMC minutes,
which propelled their yields to three-week lows.
Bond yields in general pushed passed some key chart levels
on Thursday, portending further decline, analysts said.
Longer-dated debt generated higher total returns than
intermediate issues despite similar yield declines.
Benchmark 10-year Treasuries notes were up 17/32
in price with a yield of 2.625 percent, down 6 basis points from
late on Wednesday.
The 30-year bond jumped 1-6/32 point in price
with its yield at 3.501 percent, down 6 basis points. That was
its biggest one-day yield decline in nearly four weeks.
The seven-year Treasuries yield was 7 basis points lower at
On a total return basis, the 10-year note and 30-year bond
were on track to earn 0.59 percent and 1.33 percent in late
trading, respectively, according to Reuters data. This compared
with the seven-year note which was expected to generate a 0.47
percent return on the day.
The intense bids for U.S. government debt seeped into the
30-year bond sale, the last leg of this week's $64 billion in
"It was pretty decent auction," said Aaron Kohli, interest
rate strategist at BNP Paribas in New York.
Treasuries' strong performance was part of a banner day in
the global bond market whose highlight was Greece's first debt
sale two years after it defaulted.
U.S. stocks, in contrast, suffered heavy losses with the
Nasdaq on track for its worst day since June 2012.
"That's brought a bid into Treasuries. Longer-term yields
could come down a little more," said Dan Heckman, senior fixed
income strategist at U.S. Bank Wealth Management in Kansas City,
Treasuries prices briefly turned flat earlier after news
jobless claims fell to their lowest weekly level since May 2007,
signaling more improvement in the jobs sector.
FOMC MINUTES EASE RATE-HIKE WORRIES
Disclosure of the FOMC's discussion over its bias to keep
rates low mitigated earlier fears stemming from the Fed's
summary of economic projections (SEP), which some traders took
as a sign the central bank might raise rates earlier and at a
faster pace than they had thought.
Compounding the perceived hawkish view on rates were remarks
by Fed Chair Janet Yellen at a press conference after the March
policy meeting, when she said the Fed might increase rates a
"considerable time" after it completed its bond-purchase
program, a period she defined as "around six months."
Traders dumped short-to-medium Treasuries in reaction to
policy-makers' rate views and Yellen's remarks, resulting in the
worst day for the five-year notes since July.
Since the March policy meeting, top Fed officials have
downplayed Yellen's "six month" reference and the importance of
the "dots" or the graphical presentation of SEP.
Chicago Fed President Charles Evans, who is not an FOMC
voter this year, said in a panel on global monetary policy in
Washington that easy monetary policy is needed in the United
States and around the world.
(Reporting by Richard Leong; Editing by Bernadette Baum and