TREASURIES-US 10-yr notes firmer as Moody's warns on Germany
SINGAPORE, July 24 |
SINGAPORE, July 24 (Reuters) - U.S. 10-year Treasuries edged higher in Asia on Tuesday after Moody's revised its outlook for Germany, the Netherlands and Luxembourg to negative, although the resilience of U.S. equities futures helped to limit their gains.
* Ten-year Treasuries rose about 4/32 in price to yield 1.423 percent, down 2 basis points from late U.S. trade, and not far from a record low near 1.40 percent hit on Monday.
* Moody's Investors Service changed its sovereign rating outlook for Germany, the Netherlands and Luxembourg to negative from stable as fallout from Europe's debt crisis cast a shadow over the euro zone's top-rated countries.
* The Moody's announcement helped nudge Treasuries higher, but the impact was offset somewhat as U.S. equities futures showed resilience after an initial dip, said Tomohisa Fujiki, interest rate strategist for BNP Paribas Securities in Tokyo.
* U.S. S&P 500 futures eased 0.1 percent to 1342.40, but stayed above an intraday low of 1337.20.
* "If equities had fallen further that could have opened the way for the 10-year yield to test the 1.40 percent level again in Asian trading," Fujiki said.
* Signs of a slowdown in the U.S. economy and investor jitters over the euro zone's debt crisis have bolstered demand for Treasuries in recent weeks and spurred a drop in yields.
* Demand for Treasuries will be tested this week through a series of auctions, including a sale of two-year notes later on Tuesday.
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