HONG KONG, April 6 (Reuters) - U.S. government debt prices slipped in Asia on Wednesday, adding to Tuesday's losses, after minutes of the Federal Reserve's March policy meeting showed as expected varying views over when the Fed should start unwinding its ultra-loose monetary policy.
* Traders also focus on money market conditions after a new fee structure from the Federal Deposit Insurance Corp. has disrupted trading in overnight fund markets, driving one-month bill rates near zero on Tuesday. Since then, one-month rates have steadied, although only several basis points above zero.
* Overseas trading volume is light with most trades in short-dated and intermediate issues on bets that Fed will begin rates in the first half of 2012, instead of the second half as some traders had thought.
* Ten-year June Treasury futures down 2/32 at 118-23/32, finding interim support in the mid-118 area.
* Cash 10-year government notes down 2/32 in price to yield 3.49 percent, within striking distance from 3.53 percent, which is the 61.8 percent Fibonacci retracement from the high yield of 3.77 percent on Feb 9 and the low yield of 3.14 percent on March 16.
* Two-year notes down 1/32 for a yield of 0.82 percent, holding above their 100-week moving average of 0.785 percent.
* The minutes of the Federal Open Market Committee meeting last month acknowledged the surge in oil and food prices, but most members of the rate-setting body thought inflationary risk from commodity spike would be temporary.
* Overall, the FOMC minutes signaled simmering tension between most FOMC members who reckon the economy still needs policy accommodation, and a vocal minority, which warns that keeping a super-easy policy much longer is creating inflation risk, analysts said.
* 'This statement highlights to us the ongoing debate within the committee about the relative balance of risks to the outlook and the appropriate stance of monetary policy,' Barclays Capital economist Michael Gapen wrote in a note.
* No public appearances by top Fed officials are scheduled.
* On the data front, reports on weekly mortgage applications and Chicago Fed's index on U.S. Midwest manufacturing are due, both potentially market-moving.
* Overseas stock markets were mixed, curbing the decline in bonds. Japan's Nikkei average closed down 0.3 percent on worries over production losses from last month's earthquake and tsunami, while the MSCI Asia-Pacific ex-Japan stock index rose 0.7 percent. S&P e-mini futures were up 0.2 percent.
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(Reporting by Richard Leong; Editing by Tomasz Janowski) Keywords: MARKETS TREASURIES ASIA (richard.leong@thomsonreuters.com)(RM Messaging: richard.leong.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. 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.
* Traders also focus on money market conditions after a new fee structure from the Federal Deposit Insurance Corp. has disrupted trading in overnight fund markets, driving one-month bill rates near zero on Tuesday. Since then, one-month rates have steadied, although only several basis points above zero.
* Overseas trading volume is light with most trades in short-dated and intermediate issues on bets that Fed will begin rates in the first half of 2012, instead of the second half as some traders had thought.
* Ten-year June Treasury futures down 2/32 at 118-23/32, finding interim support in the mid-118 area.
* Cash 10-year government notes down 2/32 in price to yield 3.49 percent, within striking distance from 3.53 percent, which is the 61.8 percent Fibonacci retracement from the high yield of 3.77 percent on Feb 9 and the low yield of 3.14 percent on March 16.
* Two-year notes down 1/32 for a yield of 0.82 percent, holding above their 100-week moving average of 0.785 percent.
* The minutes of the Federal Open Market Committee meeting last month acknowledged the surge in oil and food prices, but most members of the rate-setting body thought inflationary risk from commodity spike would be temporary.
* Overall, the FOMC minutes signaled simmering tension between most FOMC members who reckon the economy still needs policy accommodation, and a vocal minority, which warns that keeping a super-easy policy much longer is creating inflation risk, analysts said.
* 'This statement highlights to us the ongoing debate within the committee about the relative balance of risks to the outlook and the appropriate stance of monetary policy,' Barclays Capital economist Michael Gapen wrote in a note.
* No public appearances by top Fed officials are scheduled.
* On the data front, reports on weekly mortgage applications and Chicago Fed's index on U.S. Midwest manufacturing are due, both potentially market-moving.
* Overseas stock markets were mixed, curbing the decline in bonds. Japan's Nikkei average closed down 0.3 percent on worries over production losses from last month's earthquake and tsunami, while the MSCI Asia-Pacific ex-Japan stock index rose 0.7 percent. S&P e-mini futures were up 0.2 percent.
((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))
Reuters Terminal users can see related news and rates by double-clicking on the following:
Reuters U.S. Treasury and money market rates.....
Reuters U.S. interest-rate swap benchmark........
Tradeweb main guide.............................
Garban ICAP Treasuries data.................
Cantor Fitzgerald Treasuries data...........
Dollar money market speed guide....................
For swaps data....................................
For worldwide Treasuries reports.....................
For Tokyo U.S. Treasuries report....................
For daily Treasuries outlook........................
For Federal Reserve news...........................
For Federal Reserve polls..........................
For other U.S. fixed-income news................
For real-time economic indicators...................
((Multimedia versions of Reuters Top News are now available for:
* 3000 Xtra : visit http://topnews.session.rservices.com
* BridgeStation: view story .134
* Reuters Plus: from your WebDSS screen For more information on Top News, visit http://topnews.reuters.com))
(Reporting by Richard Leong; Editing by Tomasz Janowski) Keywords: MARKETS TREASURIES ASIA (richard.leong@thomsonreuters.com)(RM Messaging: richard.leong.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. 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.