TREASURIES-Steady in Asia before 10-year auction

TOKYO, March 10 (Reuters) - U.S. Treasuries drifted sideways in Asia on Wednesday as investors waited for a 10-year note auction following a well-bid three-year note sale the previous day.



* Tuesday's $40 billion three-year debt offering met robust demand, boosting the prospects for a solid $21 billion sale of 10-year debt later on Wednesday.



* The reopening of the previously issued 10-year note will likely go smoothly and benchmark 10-year yields are expected to stay below 3.75 percent for a while, market analysts said.



* The Treasury will also offer $13 billion worth of 30-year bonds on Thursday.



* 'Although the U.S. economy is on track for recovery, it is doing this at a slow pace, supporting Treasury demand,' said Yasutoshi Nagai, chief economist at Daiwa Securities SMBC. 'Worries over its budget deficit remain in the market but they are not strong enough to lift yields significantly higher.'



* T-note futures were up 1/32 to 117-3/32. Benchmark 10-year notes edged up 1/32 in price to yield 3.696 percent , down about one basis point from late New York trade on Tuesday.



* Two-year Treasury notes were steady in price to yield 0.875 percent.



* Persistent concerns about sovereign risk in Europe underpinned the U.S. bond market, analysts said. Fitch Ratings said on Tuesday that Britain's sovereign credit profile had deteriorated and that it still holds a negative outlook on Portugal's AA ratings.



(Reporting by Kaori Kaneko; Editing by Joseph Radford)

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