TREASURIES-Bonds firm in Asia on series of earnings disappointments
TOKYO Oct 29 (Reuters) - U.S. Treasuries edged up slightly in Asia on Monday, extending their big gains at the end of last week as disappointing corporate earnings offset better-than-expected GDP data.
* The yield on the 10-year notes dropped to 1.736 percent at one point -- its lowest in 12 days -- from 1.749 percent in late U.S. trade on Friday.
* The yield fell sharply on Friday as earnings results from Apple and Amazon undershot expectations. In Europe, Renault, Saint Gobain, Gucci and Publicis weighed in with gloomy earnings and outlooks.
* The Commerce Department on Friday reported U.S. economic growth accelerated in the third quarter to a 2 percent annual growth rate, slightly better than economists' forecast of 1.9 percent growth.
* But a sizable portion of that expansion came from government spending, and the outlook remained murky due to uncertainty over the impact of the so-called "fiscal cliff" of tax increases and government spending cuts set to kick in at the beginning of next year.
* Another source of big uncertainty is a neck-and-neck presidential race, with many investors expecting a victory by Republican Mitt Romney to boost U.S. bond yields, possibly to above two percent in the 10-year yield.
* Republicans' opposition to the Federal Reserve's aggressive easing means market players will have to rethink their assumption of low policy rates until mid-2015 if he wins while some market players also think investors may shift funds to stocks from bonds on hopes of pro-business policies.
* Bond trading looks set to slow on Monday also as Hurricane Sandy, which could become the largest storm ever to hit the United States, is set to bring much of the East Coast, including New York, to a virtual standstill.
* Wall Street firms were preparing contingency plans while NYSE said it will close its physical floor operations on Monday, moving share trading to fully electronic exchange.
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