TREASURIES-Bonds steady as market eyes cues from FOMC meeting minutes

TOKYO Wed Feb 20, 2013 12:45am EST

Related Topics

TOKYO Feb 20 (Reuters) - U.S. Treasuries held steady in Asian trading on Wednesday, as investors awaited the release later in the session of the minutes of the Federal Reserve's January policy meeting for clues to its future bond-buying plans.

* At its January meeting, the Federal Open Market Committee left in place the central bank's monthly $85 billion bond-buying stimulus plan, saying it needed to support employment conditions even as it indicated a recent stall in U.S. economic growth was likely temporary.

* "We are not seeing big moves today, because it's difficult to move ahead of the FOMC minutes," said Hiroki Shimazu, an economist at SMBC Nikko Securities in Tokyo.

"Markets will be watching for any information on the pace of purchasing Treasuries," he said.

* The Fed will likely need to keep buying bonds until the end of this year given the still-feeble state of the U.S. labor market, Atlanta Fed President Dennis Lockhart told Reuters in an interview on Tuesday.

Economists are split over whether the central bank will stop buying bonds this year.

* Yields on 10-year Treasuries edged slightly down to 2.029 percent in Asian trade on Wednesday, from 2.030 percent in late U.S. trade on Tuesday.

* Yields on 30-year Treasuries inched slightly up to 3.213 percent, from 3.211 percent on Tuesday.

* Undermining demand for safe-haven debt, Asian shares rose to their highest since August 2011 on Wednesday on an improving global economic outlook.

* But bonds were supported amid concerns that the U.S. economic recovery could be threatened by government spending cuts of about $85 billion that could take effect on March 1 if lawmakers fail to reach a deal on averting them.

* On the supply side, the Fed purchased $1.45 billion of U.S. government debt on Tuesday, maturing February 2036 through February 2043. It will buy longer-dated debt in three more operations through the rest of the week.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.