TREASURIES-Prices fall as stocks gain, before supply

Fri Feb 8, 2013 10:08am EST

Related Topics

* Prices fall as stocks jump on stronger economic data
    * Volumes seen dropping as U.S. East Coast prepares for
snowstorm
    * Treasury to sell $72 bln in new 3, 10 and 30-year bonds

    By Karen Brettell
    NEW YORK, Feb 8 (Reuters) - U.S. Treasuries fell on Friday,
erasing some of Thursday's gains, after stocks jumped and as
investors prepared for $72 billion in new supply next week.
    The Treasury will sell $32 billion in three-year notes on
Tuesday, $24 billion in 10-year notes on Wednesday and $16
billion in 30-year bonds on Thursday.
    A stronger-than-expected reduction in the trade deficit on
Friday was also seen helping riskier stocks gain, reducing
demand for safe haven bonds.
    "We're just following stocks at this point," said Rick
Klingman, a Treasuries trader at BNP Paribas in New York. "The
trade deficit number implies that there is going to be a decent
upward revision in GDP, so I think that helps with the stocks."
    A rise in exports and lower imports of oil helped push the
U.S. trade deficit to its narrowest point in nearly three years
in December, data showed on Friday. 
    Benchmark 10-year Treasuries yields fell 6/32 in
price to yield 1.99 percent, up from 1.96 percent late on
Thursday.
    The note's yields fell as low as 1.93 percent on Thursday
after comments from European Central Bank President Mario Draghi
raised speculation that the bank would cut interest rates to
stem the region's strengthening currency. 
    Ten-year Treasuries are now trading in the middle of what
traders see as a range between around 1.90 percent and 2.03
percent.
    A dramatic selloff in late January and early February pushed
the 10-year notes to more than eight month highs of 2.06 percent
on February 4.
    Trading volumes are expected to taper off on Friday as
residents on the U.S. East Coast prepared for a large snowstorm
in the region.
    The Federal Reserve will buy between $1 billion and $1.5
billion in Treasury Inflation-Protected Securities (TIPS) due
between 2020 and 2042 on Friday as part of its ongoing bond
purchase program.
FILED UNDER: