TREASURIES-Yields stabilise after EU deal jump

TOKYO, July 2 Mon Jul 2, 2012 1:02am EDT

Related Topics

TOKYO, July 2 (Reuters) - U.S. Treasuries yields steadied in Asia on Monday, taking a breather after a rally following an agreement to let euro zone rescue funds be used to stabilise debt markets and bolster its ailing banks.

* Benchmark 10-year Treasury notes traded barely changed, with their yields at 1.64 percent, having jumped from 1.55 percent after the deal was struck on Friday. Thirty-year bond yields were also almost unchanged at 2.74 percent.

* Surpassing market expectations, euro zone leaders agreed on Friday to let their rescue fund inject aid directly into stricken banks from next year and intervene in bond markets to support troubled member states.

* But the rally in yields was capped amid ongoing worries over the global economic slowdown with China reporting on Sunday that its factory activity had slowed to seven-month lows in June.

* "There's still a long way to go and the sorts of things that we would need to make us confident that Europe is no longer a huge hindrance on markets is a credible plan to provide a liquidity backstop for sovereigns and a big enough fund to convincingly recapitalise banks across the region," said Andrew Pease, Sydney-based chief investment strategist at Russell Investments Asia Pacific.

* The big data release of the week will be the June nonfarm payrolls report on Friday. Market expectations are for an anemic rise of around 90,000 new jobs, leaving the unemployment rate unchanged at 8.2 percent and creating the weakest quarter for jobs growth since the middle of 2010.

* Treasury Department announces weekly sale of 4-week bills at 1500 GMT and 3- and 6-month bills 1530 GMT.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.