TREASURIES-Prices fall before 30-year debt sale
* Prices fall before $13 billion, 30-year bond sale * Fed will buy $2.75-$2.5 billion in notes due 2020-2022 * Risk-taking in Europe, stocks gains dampen Treasuries demand By Karen Brettell NEW YORK, Jan 10 (Reuters) - U.S. bond prices fell on Thursday, after a weak 10-year auction on Wednesday increased expectations that today's 30-year bond sale would need higher yields to attract demand. The Treasury will sell $13 billion in 30-year bonds in its final sale of $66 billion in coupon-bearing supply this week. Demand for safe-haven U.S. debt ebbed on Thursday after strong demand for a sale of new Spanish government debt helped risk taking in Europe and as U.S. stock futures rose. "It's a little bit of risk on," said Tom Tucci, head of Treasuries trading at CIBC in New York. And, "I'm not so sure that real money managers have appetite for the 30-year sector of the curve right now." Benchmark 10-year notes were last down 10/32 in price to yield 1.90 percent, up from 1.86 percent late on Wednesday. Thirty-year bonds fell 20/32 in price to yield 3.10 percent, up from 3.06 percent on Wednesday. The Treasuries auction comes as investors debate whether 2013 will be the year that finally ends the 30-year bull-run in U.S. government debt. Yields are trading near eight-month highs after minutes released last week from the Federal Reserve's December meeting sparked speculation that the U.S. central bank may end its bond purchase program before year-end, sooner than most expected. "When the minutes came out it put doubt in people's minds about the duration on bond purchases, all of a sudden people started to think that maybe it's not going to happen through the balance of this year," said Tucci. The resolution of the so-called "fiscal cliff" has also dampened the safety bid for U.S. debt since the beginning of the year. Investors will now be closely watching a speech that Fed Chairman Ben Bernanke is due to give on Monday at the University of Michigan for any futher indications of how long the Fed's latest bond purchase program will last. The Fed will buy between $2.75 billion and $3.50 billion in notes due from 2020 and 2022 on Thursday as part of this program, which is designed to reduce borrowing rates and spur hiring.
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