US Treasuries slipped on Friday, with short-dated yields leading the move higher after data showed US business activity expanded at the fastest pace since 2022.

Short-dated yields climbed roughly 4 basis points just after 3pm in New York, hovering near session highs amid thin trading conditions.

The weakness in short maturities came alongside a slight uptick in market pricing for rate hikes; the September OIS rate rose from 9 to 10 basis points, while the December contract again fully priced in around 26 basis points of tightening.

Yields on 5-year through 30-year maturities added about 3 basis points each. The 30-year yield finished the week up roughly 1.5 basis points at 5.275%, with US yields outpacing gains seen in UK gilts and German bunds.

On the curve, the 2s/30s and 5s/30s spreads narrowed by 1.4 and 0.6 basis points, respectively.

Next week's investment-grade dollar issuance is expected to stay muted ahead of the seasonal surge following the US Labor Day holiday.

As of 3:46pm ET, the 2-year yield stood at 4.2316%; the 5-year at 4.4242%; the 10-year at 4.7379%; and the 30-year at 5.2783%. The 5s/30s spread was 85.23 basis points, and the 2s/10s spread was 50.42 basis points.