TREASURIES-T-notes slip as euro zone mood brightens
LONDON, Sept 4 (Reuters) - U.S. bond prices fell on Tuesday along with other safe-haven assets after the European Central Bank hinted at the scope of its bond-buying plans, boosting risk appetite. * Lower rated assets including Spanish and Italian bonds rallied after ECB President Mario Draghi was quoted telling lawmakers that ECB purchases of bonds with up to three-year maturities would not breach the European Union's taboo of directly financing economies. * T-note futures fell 5/32 to 134-19/32, also catching up with a fall seen in Europe on Monday when U.S markets were closed. * "Peripherals (in Europe) are doing a little better so it seems risk assets are outperforming at the cost of core," a trader said. * But losses were expected to be limited after Treasuries rallied sharply on Friday when U.S. Federal Reserve Chairman Ben Bernanke buoyed expectations of a new round of bond-buying stimulus for the country's struggling economy. * Economic data this week was expected to be key to whether those expectations gained traction and provided momentum for a fresh T-note rally. * The U.S. Institute of Supply Management manufacturing survey is forecast to show a small improvement, but the main focus will fall on Friday's non-farm payrolls report after Bernanke explicitly expressed concerns over the labour market. * "The Fed is clearly very concerned about the labour market, hence the importance of Friday's data. If we did see a downward surprise, then the markets would increase their bets of QE," said Nick Stamenkovic, strategist at RIA Capital Markets.
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