TREASURIES-Prices slip as investors choose stocks

Tue Apr 2, 2013 9:13am EDT

Related Topics

* Wall Street stocks poised for higher open
    * Fed's Kocherlakota, Lockhart, Lacker and Evans to speak
    * U.S. payrolls report, due Friday, to be key influence

    By Ellen Freilich
    NEW YORK, April 2 (Reuters) - Prices of U.S. Treasuries
slipped on Tuesday as European shares extended gains and U.S.
stocks looked poised for a stronger open, mildly damping demand
for safe-haven U.S. debt.
    The price cuts in Treasuries were modest, though, amid
continued concern about the impact of the Cyprus bailout and
another below-50 reading in the euro zone's Purchasing Managers
Index on manufacturing, the 20th month in a row where the
reading reflected contraction.
    "Ten-year Treasury notes sold off as European stocks opened
higher and spreads on peripherals tightened," said Tom DiGaloma,
managing director at Navigate Advisors LLC, referring to the
sovereign debt of geographically peripheral European nations.
    "Despite euro zone unemployment at 12 percent and issues in
Cyprus still unresolved as it relates to the banks, there seems
to be a 'risk on' move taking place," he said.
    Treasuries' mild retreat after a modest rise on Monday
pointed to some caution ahead of labor market data due later
this week, starting with the ADP report on Wednesday and
concluding with the U.S. March payrolls report on Friday.
    "Treasuries might struggle for significant direction ahead
of Friday's employment report," said John Canavan, fixed-income
analyst at Stone & McCarthy Research Associates in Princeton,
New Jersey.
    Benchmark 10-year Treasury notes were down 7/32,
their yields rising to 1.86 percent from 1.84 percent on Monday.
    "With long-end supply coming next week, we favor selling
10-years near 1.83 percent support given that we have a job
growth figure Friday that will most likely print north of
200,000," DiGaloma said.
    The number of jobs added to non-farm payrolls, as reported
by the U.S. Labor Department on Friday, will be closely
scrutinized for signs of further improvement in hiring.
    According to the median estimate of economists polled by
Reuters, the report is expected to show that 200,000 jobs were
added in March. 
    Reports on U.S. February factory orders and March vehicles
sales due Tuesday are expected to get some attention, but
typically are not market movers.
    Two Federal Reserve bank presidents are scheduled to speak
during the day: Fed Bank of Minneapolis President Narayana
Kocherlakota at 1 p.m. (1700 GMT) and Fed Bank of Atlanta
President Dennis Lockhart at 1:30 p.m. (1730 GMT). Fed Bank of
Chicago President Charles Evans and Fed Bank of Richmond
President Jeffrey Lacker participate in a panel on monetary
policy at 7:30 p.m. (2330) GMT.
FILED UNDER: