TREASURIES-Bonds softer after weak inflation-linked auction
TOKYO, Sept 21
TOKYO, Sept 21 (Reuters) - U.S. Treasuries eased slightly in Asia on Friday, extending their retreat after a surprisingly weak auction of inflation-protected debt late in the previous session.
* The yield on 10-year notes rose slightly to 1.780 percent from 1.765 percent in late U.S. trade, and off a one-week low of 1.723 percent hit earlier on Thursday.
* An auction of $13 billion of 10-year Treasury inflation-protected securities was met with the lowest bid-to-cover ratio since April 2009, indicating sluggish demand for the securities.
* Still, the market is supported overall by concerns over tepid global growth after a barrage of disappointing economic data on Thursday, including U.S. weekly jobless claims and manufacturing data out of China and Europe.
* The market is also helped by firmness in the mortgage bond market after the start of the Fed's buying in that securities last week.
* The latest report from the New York Fed indicated daily average buying for the week ending September 19 was near the projected $4.0 billion daily pace of QE3, which is double the normal supply of the paper of $2 billion per day.
* A Fed official know for his hawkish stance, Minneapolis Fed chief Narayana Kocherlakota, also pitched a bold and perhaps surprising proposal on Thursday to keep interest rates low until the U.S. unemployment rate drops to 5.5 percent, as long as there's no pick-up in inflation.
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