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NEW YORK, Dec 30 (Reuters) - The U.S. Treasury yield curve flattened on Wednesday afternoon as traders bought longer-dated debt to rebalance their portfolios ahead of the month-end.
The 30-year yield was last down 1.4 basis points at 1.660%, pulling the spread between five- and 30-year yields flatter to 129.5 basis points. That spread had hit a high of 131.2 basis points earlier in the day.
The benchmark 10-year yield was a basis point lower at 0.925%, bringing the two-year, 10-year spread to 80.3 basis points.
Traders must rebalance their portfolios at the end of the month, which can sometimes lead to market moves that are out of sync with news and economic data. The maturity of a bond portfolio falls at the end of the month as bonds move closer to their maturity date. In order to rebalance, traders buy longer-dated debt, which drives yields lower.