May 28, 2015 / 2:42 PM / 2 years ago

TREASURIES-Long-dated yields edge higher on profit-taking

* U.S. weekly jobless claims rise to 282,000

* Traders take profit after institutional month-end buying

* Treasury to sell $29 bln in 7-yr notes

By Sam Forgione

NEW YORK, May 28 (Reuters) - U.S. long-dated Treasury yields edged higher on Thursday after traders took profit following a recent price rally, while data showing that U.S. weekly jobless claims unexpectedly rose drew some demand for short-dated notes.

U.S. 30-year Treasury yields rose slightly to a session high of 2.9 percent after hitting a fresh nearly three-week low of 2.86 percent earlier in the session. The yields had fallen in the past two sessions, partly on institutional investors buying the bonds for portfolio readjustments ahead of the month’s end.

Analysts said traders who had bought the bonds in anticipation of the institutional purchases took profit on that trade on Thursday, since the trade performed well with yields falling about 12 basis points on Tuesday and Wednesday combined. Yields move inversely to prices.

“We’ve seen some month-end buying all week,” said Kim Rupert, managing director at Action Economics in San Francisco. “I think we’re seeing a little bit of profit-taking on that move.”

The number of Americans filing new claims for unemployment benefits unexpectedly rose 7,000 last week to a seasonally adjusted 282,000, data showed. That helped push short-dated Treasury note yields slightly lower.

The short-dated notes, which are sensitive to expectations for when the Federal Reserve will hike interest rates, attracted some demand since the claims data reinforced a view that the Fed could be less aggressive about the pace of rate increases.

“We’re seeing a turn in claims for the first time, which corroborates with the idea that perhaps we’ve seen the best of the jobs data, and that means the Fed can’t hike as aggressively as they would like to,” said George Goncalves, head of U.S. rates strategy at Nomura Securities International in New York.

The U.S. Treasury will sell $29 billion in seven-year notes at 1:00 p.m. ET (1700 GMT) to mark the last round of this week’s $90 billion in new government debt supply.

U.S. 30-year Treasury prices were last down 8/32 in price to yield 2.89 percent, from 2.88 percent late on Wednesday .

U.S. three-year notes were last up 2/32 in price to yield 0.97 percent, from a yield of 0.99 percent late Wednesday. Benchmark 10-year notes were mostly flat in price to yield 2.14 percent, little changed from late Wednesday’s yield. (Editing by Bernadette Baum)

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