By Tom Ryan
NEW YORK, Feb 8 (Reuters) - Longer-dated U.S. Treasury debt prices edged higher on Monday on worries over the fiscal health of some European countries' debt, and ahead of the Treasury Department's $40 billion auction of three-year notes.
Meanwhile, short-term U.S. government debt garnered much of the day's light trading volume as investors made room for the new supply set for Tuesday.
'There's general weakness as investors set up for the rest of the auctions this week,' Bill Bemis, portfolio manager with Aviva Investors North America, in Des Moines, Iowa.
'We're seeing a little more movement on the shorter end, which usually precludes a decent auction,' he said.
While investors were positioning for this week's $81 billion of new supply, Greece's fiscal woes remained a focus for market participants and continued the flight-to-safety bid from riskier assets such as stocks and commodities.
The 3-year Treasury bond was unchanged yielding 1.26 percent, while the benchmark 10-year Treasury note was up 3/32 to yield 3.57 percent, unchanged from Friday.
Benchmark ten-year bond yields have fallen about 26 basis points year to date as fears about sovereign risk coupled with China's credit tightening attracted investors to safe haven Treasury debt.
The 30-year Treasury bond price was up 13/32 for a yield of 4.50 percent, down from Friday's yield of 4.52.
Monday's Treasury trading volume totaled $81.6 billion, 46 percent below its 20-day average of $149.81 billion in mid-afternoon trading, according to bond broker, ICAP, which tracks interbroker flows.
In recent weeks, investors began flocking to the safety of U.S government bonds as Greece's sovereign debt woes continued to spark anxiety about the fiscal strength of some euro zone nations.
Over the weekend, officials from the European members of the Group of Seven industrialized nations vowed to hold Greece to its cost-cutting program. But investors were waiting for European leaders to take further steps to address the continent's debt crisis. For more, click on
'People are waiting for a coordinated governmental response, both to Greece and the other countries that may find themselves in the same situation,' said Jim Vogel, head of fixed income research at FTN Financial Capital Markets in Memphis, Tennessee.
Spain and Portugal are two of the countries under close scrutiny for their shaky fiscal situations.
'Part of the sense of what we're dealing with is no one was ready for these issues to come up this quickly,' Vogel said.
Traders were also spooked by falling U.S. stocks, which eased on fears that possible fallout from the euro zone's sovereign debt troubles might force banks to raise capital, diluting the holdings of existing share owners.
The market also took in remarks by James Bullard, the president of the Federal Reserve Bank of St. Louis. He told Reuters in an interview that the Federal Reserve could begin selling off some of the assets it is holding later this year. Prices were little changed, however, following Bullard's comments.
In addition to the $40 billion three-year note auction on Tuesday, The Treasury will also sell $25 billion of 10-year notes on Wednesday, and $16 billion of 30-year bonds on Thursday.
(Additional reporting by Emily Flitter and Ellis Mnyandu; Editing by Diane Craft)
((thomas.j.ryan@thomsonreuters.com; +1-646-223-6826; Reuters Messaging: thomas.j.ryan.reuters.com@reuters.net)) Keywords: MARKETS BONDS (Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com * BridgeStation: view story .134 For more information on Top News: http://topnews.reuters.com) COPYRIGHT Copyright Thomson Reuters 2010. 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, Feb 8 (Reuters) - Longer-dated U.S. Treasury debt prices edged higher on Monday on worries over the fiscal health of some European countries' debt, and ahead of the Treasury Department's $40 billion auction of three-year notes.
Meanwhile, short-term U.S. government debt garnered much of the day's light trading volume as investors made room for the new supply set for Tuesday.
'There's general weakness as investors set up for the rest of the auctions this week,' Bill Bemis, portfolio manager with Aviva Investors North America, in Des Moines, Iowa.
'We're seeing a little more movement on the shorter end, which usually precludes a decent auction,' he said.
While investors were positioning for this week's $81 billion of new supply, Greece's fiscal woes remained a focus for market participants and continued the flight-to-safety bid from riskier assets such as stocks and commodities.
The 3-year Treasury bond was unchanged yielding 1.26 percent, while the benchmark 10-year Treasury note was up 3/32 to yield 3.57 percent, unchanged from Friday.
Benchmark ten-year bond yields have fallen about 26 basis points year to date as fears about sovereign risk coupled with China's credit tightening attracted investors to safe haven Treasury debt.
The 30-year Treasury bond price was up 13/32 for a yield of 4.50 percent, down from Friday's yield of 4.52.
Monday's Treasury trading volume totaled $81.6 billion, 46 percent below its 20-day average of $149.81 billion in mid-afternoon trading, according to bond broker, ICAP, which tracks interbroker flows.
In recent weeks, investors began flocking to the safety of U.S government bonds as Greece's sovereign debt woes continued to spark anxiety about the fiscal strength of some euro zone nations.
Over the weekend, officials from the European members of the Group of Seven industrialized nations vowed to hold Greece to its cost-cutting program. But investors were waiting for European leaders to take further steps to address the continent's debt crisis. For more, click on
'People are waiting for a coordinated governmental response, both to Greece and the other countries that may find themselves in the same situation,' said Jim Vogel, head of fixed income research at FTN Financial Capital Markets in Memphis, Tennessee.
Spain and Portugal are two of the countries under close scrutiny for their shaky fiscal situations.
'Part of the sense of what we're dealing with is no one was ready for these issues to come up this quickly,' Vogel said.
Traders were also spooked by falling U.S. stocks, which eased on fears that possible fallout from the euro zone's sovereign debt troubles might force banks to raise capital, diluting the holdings of existing share owners.
The market also took in remarks by James Bullard, the president of the Federal Reserve Bank of St. Louis. He told Reuters in an interview that the Federal Reserve could begin selling off some of the assets it is holding later this year. Prices were little changed, however, following Bullard's comments.
In addition to the $40 billion three-year note auction on Tuesday, The Treasury will also sell $25 billion of 10-year notes on Wednesday, and $16 billion of 30-year bonds on Thursday.
(Additional reporting by Emily Flitter and Ellis Mnyandu; Editing by Diane Craft)
((thomas.j.ryan@thomsonreuters.com; +1-646-223-6826; Reuters Messaging: thomas.j.ryan.reuters.com@reuters.net)) Keywords: MARKETS BONDS (Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com * BridgeStation: view story .134 For more information on Top News: http://topnews.reuters.com) COPYRIGHT Copyright Thomson Reuters 2010. 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.