TREASURIES-Bonds buoyed by concern about U.S., Europe economies
* Investors turn to lower risk assets in worries over U.S. fiscal cliff * Greek debt woes reignite concern over Europe debt crisis * Benchmark yields touch lowest in 10 weeks By Chris Reese NEW YORK, Nov 13 (Reuters) - U.S. Treasury debt prices rose on Tuesday with safe-haven buying spurred by concern about a delay in payment of aid to debt-laden Greece, souring German investor sentiment and a potential U.S. fiscal crisis. Treasuries extended last week's gains, which followed President Barack Obama's re-election, as investors fretted about political brinkmanship by Democrats and Republicans over the "fiscal cliff" - $600 billion in spending cuts and tax hikes due to come into effect early next year which could send the economy back into recession. U.S. lawmakers have seven weeks to hammer out a compromise to avoid the fiscal cliff. Greece is also at the forefront of investors' minds again. A euro-zone finance ministers' meeting on Monday gave Athens two more years to make cuts demanded of it, but held off disbursing more aid as the euro zone and IMF clashed over a longer-term target date to shrink the country's debt pile. The risk-on mood was also supported by data showing analyst and investor sentiment unexpectedly fell in Germany, Europe's largest economy, in November. "You are seeing a combination of U.S. fiscal cliff worries, the recent erosion on Wall Street, and then the resumption of these euro-zone concerns," said Kim Rupert, managing director of global fixed-income analysis at Action Economics LLC in San Francisco. The benchmark 10-year Treasury note gained 4/32 in price to yield 1.60 percent, down from 1.61 percent late Friday. The yield touched 1.57 percent on Tuesday, marking the lowest in 10 weeks. There was no U.S. trading of Treasuries on Monday due to the Veterans Day holiday. The 30-year Treasury bond rose 8/32 in price to yield 2.73 percent, down from 2.75 percent late Friday. President Obama on Friday invited congressional leaders to the White House to start negotiating a deal on the fiscal cliff, vowing to veto any bill that would extend tax cuts for the top 2 percent of wage earners. Investors are worried the United States will be plunged back into recession if the spending cuts and tax increases are allowed to go into effect. While Kevin Giddis, managing director of fixed income at Morgan Keegan in Memphis, Tennessee, feels the chances of the United States actually going over the fiscal cliff are remote, he said "those who play in the market appear to be hedging their bets by purchasing safe-haven securities like Treasuries." Giddis also said "the reduction of debt in Greece keeps getting pushed out, and there doesn't seem to be a lot of agreement as to how, when, what and where, when it comes to the euro-zone fixes." The Federal Reserve was a large buyer of Treasuries on Tuesday as part of its "Operation Twist" stimulus program, under which it is selling shorter-dated Treasuries and using the proceeds to buy longer-dated Treasuries in a bid to lower longer-term borrowing costs like those on mortgages. The Fed on Tuesday bought $4.851 billion of Treasuries maturing November 2018 through August 2020.
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