TREASURIES-Bonds steady, underpinned by spending cut concerns

TOKYO Thu Feb 28, 2013 1:14am EST

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TOKYO Feb 28 (Reuters) - U.S. Treasuries were steady in Asian trading on Thursday, caught between rising risk appetite after reassurance that the Federal Reserve will continue buying debt and ongoing concerns about looming U.S. spending cuts.

* The yield on 10-year Treasuries fell to 1.89 percent in Asian trade on Thursday, down slightly from 1.90 percent in late U.S. trade on Wednesday.

* The yield on 30-year Treasuries inched up to 3.09 percent, from 3.08 percent on Wednesday.

* Fed chairman Ben Bernanke, speaking before Congress for a second day on Wednesday, downplayed signs of internal divisions, saying the policy of quantitative easing has the support of a "significant majority" of top central bank policymakers.

* "Bernanke let the markets know that the Fed will continue its stimulus for a while, which was a relief for stocks and undermined some demand for bonds, but it's hard to sell bonds with the 'sequester' issue unresolved," said a fixed-income fund manager at a Japanese asset management firm.

* President Barack Obama and Republican congressional leaders have not reached a deal to avert automatic government spending cuts set to begin on Friday.

Economists said these cuts worth $85 billion would hurt the economy.

* On the supply side, the Fed bought $5.02 billion in debt due 2017 on Wednesday as part of its ongoing asset purchase program.

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