TREASURIES-Prices climb on Europe growth worries and U.S. jobless
* Surveys show downturn in euro zone businesses * U.S. weekly jobless claims rise by more than expected * Treasuries underpinned by concern over government spending cuts By Chris Reese NEW YORK, Feb 21 (Reuters) - U.S. Treasuries rose on Thursday as worries over a lack of economic recovery in Europe and higher-than-expected U.S. claims for jobless benefits prompted investors to buy assets perceived as safe havens. Treasuries were bolstered early in the day as prospects the debt-laden euro zone might soon emerge from recession were shaken, with surveys showing business indicators unexpectedly worsened this month, especially in France. Price gains were extended after data showing the number of Americans filing new claims for unemployment benefits rose by more than expected last week. "The job market is gradually improving but not fast enough for the Fed to remove accommodation. We still think a Fed rate hike is a late 2014 to early 2015 event. They might taper off bond purchases in the fourth quarter," said Jacob Oubina, senior economist at RBC Capital Markets in New York. U.S. bonds weakened briefly on Wednesday as the latest minutes from the Federal Open Market Committee showed policymakers discussed slowing or stopping Federal Reserve bond purchases aimed at reducing unemployment. They later rebounded as a sharp fall in stock prices rekindled some safe-haven bids for bonds. Benchmark 10-year Treasury notes on Thursday were trading 10/32 higher in price to yield 1.98 percent, down from 2.01 percent late Wednesday but still well within the 1.93 percent to 2.06 percent range that has held sway for over three weeks. Treasuries prices remain underpinned by concerns over the potential economic impact of $85 billion of automatic government spending cuts set to kick in March 1. Few analysts expect Republicans and Democrats to reach any sort of budget agreement to avoid the cuts before the deadline. The Fed is scheduled to buy $3 billion to $3.75 billion of Treasuries maturing November 2018 through February 2020 on Thursday as part of its latest economic stimulus program. The central bank is currently buying $45 billion per month of Treasuries and $40 billion per month of mortgage-backed securities in an effort to reduce unemployment and spur economic recovery. There will also be an auction of 30-year Treasury Inflation Protected Securities later on Thursday. Ahead of the sale, 30-year Treasury bonds were trading 19/32 higher in price to yield 3.17 percent, down from 3.20 percent late Wednesday.
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