September 10, 2009 / 6:02 PM / 8 years ago

TREASURIES-Bonds rally on robust 30-year debt auction

* Heavy bidding at $12 bln 30-year bond reopening

* 2nd highest bid-to-cover since 30Y brought back in 2006

* U.S. jobless claims fell in latest week (Updates market action, adds fresh quote, changes byline)

By Richard Leong

NEW YORK, Sept 10 (Reuters) - U.S. Treasury debt prices jumped on Thursday, with the 30-year bond gaining two points in price after robust demand at a $12 billion reopening of a prior 30-year bond issue.

There have been lingering concerns the burgeoning federal budget gap will hurt the United States’ long-term creditworthiness and foreign appetite for Treasuries. New borrowing will approach $2 trillion this fiscal year.

But the final of this week’s auctions signaled there is persistent demand for U.S. government debt.

“This seals in the can that there is a lot of demand for Treasuries no matter what the maturity is,” said Rudy Narvas, senior strategist at 4Cast Ltd in New York.

Data showed the bidding was the second highest since the 30-year bond, the longest U.S. government maturity, was reintroduced in February 2006.

Benchmark 30-year Treasury bonds US30YT=RR last traded up 2-4/32 at 104-30/32. Their yield, which moves inversely to price, was 4.21 percent, down from 4.33 percent late on Wednesday.

The reopened 30-year bonds cleared at a high yield of 4.238 percent, according to Treasury data. For more see [ID:nTAR000192].

In “when-issued” trading, traders had expected the reopened 30-year issue to yield 4.28 percent. (Editing by Andrea Ricci)

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