TREASURIES-U.S. bonds stabilise, weekly jobless data eyed

Thu Apr 18, 2013 3:52am EDT

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LONDON, April 18 (Reuters) - U.S. Treasuries steadied in
Europe on Thursday with 10-year yields holding near their lowest
in more than four months and investors looking for further
impetus from weekly jobless claims due later in the day.
    The Treasury market paused for breath after a sharp rally
the previous day in the wake of a selloff in U.S. equities
triggered by profit concerns and sliding commmodity prices.
    The 10-year T-note yielded 1.695 percent,
unchanged from late U.S. trade and within sight of Wednesday's
intraday low of 1.673 percent, its lowest in over four months.
    "There was a big drop in yields yesterday and we're
recuperating from that and waiting for more direction from data
later today," said Philip Marey, a strategist at Rabobank.
    "The issue in the market is the slowdown in China and in the
U.S. So now the main focus for the day will be the jobless
claims which will give us some sense of where we are now in
terms of employment growth and, with the Philly Fed, whether the
economic slowdown in March was just temporary."
    The Philadelphia Fed's factory index due at 1400 GMT is
forecast to rise to 3.0 in April from 2.0 last month, according
to the consensus outcome of a Reuters poll of economists. 
    Before that, weekly data is expected to show the number of
Americans filing weekly jobless claims edged up to 350,000 from
346,000. 
    "We have had a series of disappointing U.S. data, starting
from the ISM manufacturing index to employment and retail sales.
If the economic data continues to disappoint, the 10-year yield
could head to 1.6 percent," said Shinichiro Kadota, strategist
at Barclays in Tokyo.
    These weak numbers fanned expectations the Federal Reserve
will maintain the pace of its bond buying unchanged at $85
billion for now.
    Treasuries were also supported by comments from European
Central Bank Governing Council member Jens Weidmann on Wednesday
that Europe's economic recovery could take as much as another
decade and that the ECB may cut rates if the economy weakens.
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