TREASURIES-Bonds firm ahead of Fed after China PMI disappoints

TOKYO Wed May 1, 2013 1:35am EDT

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TOKYO May 1 (Reuters) - U.S. 10-year Treasuries firmed in Asian trading on Wednesday after data showed growth in China's manufacturing sector unexpectedly slowed, but moves were slight as investors awaited the outcome of the U.S. Federal Reserve's policy meeting.

* China's official purchasing managers' index (PMI) fell to 50.6 in April from March's 11-month high of 50.9, falling short of the 51 forecast as new export orders and input prices contracted.

* The Fed is expected to decide to keep buying bonds aggressively for most of 2013 at its two-day policy-setting meeting, after cool inflation data. The central bank's statement is scheduled to be released at 1800 GMT.

* Also later on Wednesday, The Treasury will announce its second-quarter refunding plans, with investors watching for any cuts in planned issuance.

* "We don't expect a cut in issuance of coupon-bearing debt, but we will be watching to see what the Treasury decides," said a fixed-income fund manager at a Japanese asset management firm.

* The yield on U.S. 10-year notes was slightly down, at 1.668 percent on Wednesday from 1.675 percent in late U.S. trading on Tuesday.

* The yield on 30-year bonds drifted lower to 2.874 percent from 2.876 percent in late U.S. trade.

* On the U.S. data front, a report on Tuesday showed that Midwest business activity unexpectedly shrunk in April to its lowest level since September 2009, as a gauge of employment receded.

April's non-farm payrolls report is scheduled for release on Friday. The median estimate of economists polled by Reuters is that employers added 145,000 jobs last month.

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