LONDON, July 19 U.S. government bond yields kept
close to historic lows on Thursday, as concerns about falling
demand at a Spanish debt auction offset a slight improvement in
risk appetite on the back of upbeat earnings from European
* Markets expect jobless claims data later in the day to
show the U.S. economic recovery is flagging, but a positive
surprise is not expected to push yields much higher as the
intractable euro debt crisis keeps investors on their toes.
* A Spanish auction of two- to seven-year debt saw falling
demand and a significant rise in borrowing costs, reigniting
worries that Madrid may need state aid in addition to the bank
bailout that has already been agreed.
* The auction's results gave a boost to U.S. bonds and
weighed on European equities, which hit an 11-week high earlier
in the day.
* "It looks like the Spanish auction was poorly received
... so we are off the lows, but (volumes are) thin and we're
trading in a 2-3 tick range," one trader said.
* U.S. 10-year yields were virtually flat on the
day at 1.4956 percent, not far from the historic low of 1.442
percent set on June 1, which was matched on Monday and is the
lowest level going back to the early 1800s, according to data
compiled by Reuters.
* Federal Reserve Chairman Ben Bernanke was coy about future
monetary policy moves in his testimony before the U.S. Congress
earlier this week, disappointing those who expected a clearer
signal that the central bank was eager to embark on a third
round of bond purchases, or quantitative easing.