TREASURIES-T-note yields stabilise at one-month highs

LONDON Fri Dec 14, 2012 6:14am EST

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LONDON Dec 14 (Reuters) - U.S. T-note yields stabilised at one-month highs on Friday after rising on supply pressure, better-than-expected data and uncertainty over the long-term impact of the Federal Reserve's latest move.

* The Treasury sold $13 billion of 30-year bonds on Thursday at a high yield of 2.917 percent and demand was weaker than average. Next week, it will offer two-year, five-year and seven-year notes, as well as five-year Treasury inflation-protected securities.

* Data on Thursday showed claims for unemployment benefits were lower than expected in the last week.

* On Wednesday, the Federal Reserve announced a new round of monetary stimulus and took the unprecedented step of indicating interest rates would remain near zero until unemployment falls to at least 6.5 percent.

* Ten-year T-note yields were last 0.7 basis points lower on day at 1.7248 percent, having risen as high as 1.749 earlier, the highest in about a month.

* "The market is trading pretty soft, we had some supply as well and people are digesting the flexibility the Fed is affording itself ... It raises the question how long rates will stay low," said Craig Collins, a trader at Bank of Montreal.

* "We're testing a key support level, the 200-day moving average at (around) 1.75 percent ... It has brought some demand and I think we need a new catalyst to breach that level," he added.

* The 200-day moving average was last at 1.7561 percent.

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