By Ellen Freilich
NEW YORK, Sept 21 (Reuters) - Long-dated U.S. Treasuries slipped on Monday ahead of another massive wave of debt auctions and a Federal Reserve policy meeting that could strike a more positive tone on the economy.
But stock market losses kept a bid under shorter-dated U.S. government securities as investors sought their safe-haven appeal.
'We seem to be following the path of equities,' said Mary Ann Hurley, vice president of fixed income trading at D.A. Davidson & Co in Seattle. 'We do have a lot of supply to bid on this we 1701522978
Late in the session, benchmark 10-year Treasury notes were down 4/32 in price, their yields at 3.48 percent, up from 3.46 percent late on Friday.
Thirty-year bonds were down 7/32, their yields rising to 4.23 percent from 4.22 percent on Friday.
Two-year Treasury notes were up 1/32 in price to yield 0.99 percent, while five-year notes were unchanged, yielding 2.46 percent.
The Treasury will this week auction $112 billion of two-year, five-year and seven year notes.
With so much extra supply on the way, it was natural dealers trimmed prices, said William O'Donnell, head of U.S. Treasury strategy at RBS Securities in Stamford, Connecticut.
Another factor may have been the possibility the Fed could speak more favorably about the economy at the end of its two-day policy meeting than after previous sessions when the U.S. recession was in full swing.
The Fed is not expected to change interest rates at the meeting on Tuesday and Wednesday but could hint it is mulling rate hikes and dim demand for less risky assets like public debt.
'In August the Fed said activity was leveling out, an improvement from June's statement when they said the pace of the economic contraction was slowing,' said Chris Rupkey, chief financial economist at Bank of Tokyo/Mitsubishi UFJ.
When the previous recession ended in November 2001, it was the FOMC statement of March 19, 2002 that said the economy was expanding, he said.
The Fed bought Treasuries on Monday as part of its $300 billion program intended to free up lending and lower longer-term interest rates like those on mortgages.
The central bank has already done about 95 percent of the buying under the program, and has said it expects to complete the purchases by the end of October.
(Additional reporting by Chris Reese: editing by Andrew Hay) (ellen.freilich@thomsonreuters.com; +1 646 223 6309; Reuters Messaging: ellen.freilich.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
NEW YORK, Sept 21 (Reuters) - Long-dated U.S. Treasuries slipped on Monday ahead of another massive wave of debt auctions and a Federal Reserve policy meeting that could strike a more positive tone on the economy.
But stock market losses kept a bid under shorter-dated U.S. government securities as investors sought their safe-haven appeal.
'We seem to be following the path of equities,' said Mary Ann Hurley, vice president of fixed income trading at D.A. Davidson & Co in Seattle. 'We do have a lot of supply to bid on this we 1701522978
Late in the session, benchmark 10-year Treasury notes were down 4/32 in price, their yields at 3.48 percent, up from 3.46 percent late on Friday.
Thirty-year bonds were down 7/32, their yields rising to 4.23 percent from 4.22 percent on Friday.
Two-year Treasury notes were up 1/32 in price to yield 0.99 percent, while five-year notes were unchanged, yielding 2.46 percent.
The Treasury will this week auction $112 billion of two-year, five-year and seven year notes.
With so much extra supply on the way, it was natural dealers trimmed prices, said William O'Donnell, head of U.S. Treasury strategy at RBS Securities in Stamford, Connecticut.
Another factor may have been the possibility the Fed could speak more favorably about the economy at the end of its two-day policy meeting than after previous sessions when the U.S. recession was in full swing.
The Fed is not expected to change interest rates at the meeting on Tuesday and Wednesday but could hint it is mulling rate hikes and dim demand for less risky assets like public debt.
'In August the Fed said activity was leveling out, an improvement from June's statement when they said the pace of the economic contraction was slowing,' said Chris Rupkey, chief financial economist at Bank of Tokyo/Mitsubishi UFJ.
When the previous recession ended in November 2001, it was the FOMC statement of March 19, 2002 that said the economy was expanding, he said.
The Fed bought Treasuries on Monday as part of its $300 billion program intended to free up lending and lower longer-term interest rates like those on mortgages.
The central bank has already done about 95 percent of the buying under the program, and has said it expects to complete the purchases by the end of October.
(Additional reporting by Chris Reese: editing by Andrew Hay) (ellen.freilich@thomsonreuters.com; +1 646 223 6309; Reuters Messaging: ellen.freilich.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.