TREASURIES-U.S. bonds steady as higher yields entice investors

LONDON Tue Jan 29, 2013 6:21am EST

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LONDON Jan 29 (Reuters) - U.S. Treasuries held broadly steady on Tuesday as investors bought back into the market after a sell-off took 10-year yields briefly above 2 percent on Monday, making them slightly more enticing.

* Ten-year U.S. bond yields were flat at 1.96 percent, having broken through 2 percent for the first time since last April on Monday. Yields were steady across maturities.

* "The market finds support at 2 percent and it has been enough to bring in some real money," Craig Collins, trader at Bank of Montreal, said.

* Monday's sell-off was partly driven by data showing orders for long-lasting goods rose more than expected in December and as investors sought to lower prices before bond sales this week.

* With the Federal Reserve beginning a two-day policy meeting on Tuesday, markets are especially sensitive to any data showing economic growth may be picking up enough for the Fed to mull pulling back on quantitative easing (QE).

* But Collins said the market was neutral going into the meeting: "The market is not exposed one way or another."

* Minutes of the Fed's December meeting unexpectedly highlighted growing discomfort with the bond buying, running at $85 billion a month, although analysts do not expect any change to be announced after the meeting ends on Wednesday.

* "In the end, I think the market won't get the amount of information that they would like to get from the Fed. I think they will still be rather evasive about when to end QE3," said Phillip Marey, strategist at Rabobank.

* Investors would also look to the flood of data this week including growth, inflation and jobs numbers to gauge the monetary policy outlook.

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