TREASURIES-Yields mixed amid data drought, debt supply concerns

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Investors cautious amid lack of fresh economic data

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University of Michigan survey shows consumer sentiment decline

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Potential Supreme Court decision could impact Treasury issuance

By Davide Barbuscia

NEW YORK, Nov 7 (Reuters) - U.S. Treasury yields were little changed on Friday as investors locked in profits from the previous day's bond rally and looked ahead to a busy week of government debt auctions. Treasury prices rose and yields fell on Thursday on the back of job market gauges that showed a slowdown in the economy, which raised the chances that the Federal Reserve may cut interest rates again at its next policy meeting in December. The Labor Department did not release the October jobs report as scheduled on Friday because of the U.S. government shutdown. With little fresh data to assess economic conditions, investors were left to consolidate earlier gains or maintain positions.

"As an industry, when there's a lack of data we tend to freeze, and I think there's a little bit of freezing going on with the government data issue," said Mark Hackett, chief market strategist for Nationwide's Investment Management Group.

"We missed our second consecutive payroll report this morning ... when there's uncertainty, the easiest place to go is the sidelines, and that, at the margin, is having a little bit of an impact," he said. Investors had to make do with the University of Michigan's preliminary consumer sentiment index for November, which showed sentiment fell to 50.3, the lowest level since June 2022, on worries about the economic impact of the government shutdown. Year-ahead inflation expectations inched up from 4.6% last month to 4.7% this month, the data showed.

Treasury yields, which move inversely to prices, edged lower after the release.

Benchmark 10-year yields were last at 4.093%, roughly unchanged from Thursday, while two-year yields shed about one basis point to 3.553%. Further out the yield curve, 30-year yields were higher by about two bps to 4.704%.

The Treasury next week will issue debt with maturities of three, 10, and 30 years, for a total of $125 billion. The U.S. fiscal picture this week returned to prominence among investors because of the potential impact of a U.S. Supreme Court decision against President Donald Trump's sweeping tariffs, which could lead to wider government budget deficits and more Treasury debt supply hitting the markets if the tariffs are revoked.

"Most of the weakness (in bonds) is related to the Supreme Court tariff issue ... the Treasury is going to have to pretty significantly change their issuance schedule if and when that decision comes out," Hackett said. (Reporting by Davide Barbuscia; Editing by Paul Simao)