TREASURIES-U.S. bonds slip ahead of 30-year debt auction

SINGAPORE Wed Jan 9, 2013 11:33pm EST

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SINGAPORE Jan 10 (Reuters) - Longer-end U.S. Treasuries slipped in Asia on Thursday ahead of an auction of 30-year bonds, with firmness in regional equities helping to add to their weak tone.

* Ten-year Treasuries fell about 3/32 in price to yield roughly 1.873 percent, up 1 basis point from late U.S. trade on Wednesday.

Thirty-year Treasuries dropped about 8/32 in price to yield 3.076 percent, up 1 basis point from late U.S. trade.

* The Treasury will sell $13 billion in 30-year bonds later on Thursday.

"I think there should be a little bit of cheapening ahead of the supply," said a trader for a U.S. brokerage house in Tokyo.

Still, while longer-end Treasuries may be weighed down going into the auction, the debt sale itself could be absorbed relatively smoothly, when taking into account the fact that the Fed has been buying longer-term Treasuries from the market under its asset-buying programme, the trader said.

The Fed is currently buying $40 billion in mortgage-backed securities and $45 billion in longer-dated Treasuries each month in a bid to push down borrowing costs and spark faster growth.

* Firmness in Asian equities helped add to the weak tone in safe haven Treasuries. In the stock market, MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 percent, getting a boost from stronger-than-expected Chinese trade data.

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