TREASURIES-Prices pare gains before 10-year note sale
* U.S. bond prices gain as stocks slip * Treasury to sell $21 bln in 10-year notes * Fed buys $1.50 bln bonds due 2038-2043 * Unlocking of hedges for Verizon bond deal helps rally By Karen Brettell NEW YORK, Sept 11 (Reuters) - U.S. Treasuries prices rose on Wednesday as stocks dipped, though gains were pared as investors prepared for the Treasury to sell $21 billion in 10-year notes, the second sale in $65 billion worth of new supply this week. Bond prices were up without new economic catalysts, with yields holding in the recent range as many investors were reluctant to enter into new positions ahead of a highly anticipated Federal Reserve meeting next week. Uncertainty over whether the U.S. may enter conflict with Syria also added to some investors' hesitance to trade. "We're all kind of in a waiting pattern for the Fed and seeing how the Syria thing plays out," said Lou Brien, market strategist at DRW Trading in Chicago. Benchmark 10-year notes were last up 2/32 in price to yield 2.96 percent, down from 2.97 percent late on Tuesday. They have fallen from a two-year high of 3.01 percent on Friday. The unwinding of hedges set ahead of Verizon's record-breaking corporate bond deal may have helped Treasuries rally. Verizon launched a $49 billion sale on Wednesday, eclipsing the previous investment grade record of $17 billion by Apple in April, according to IFR, a Thomson Reuters service. Higher yields may help the Treasury sell $21 billion in a 10-year note reopening later on Wednesday, though nervousness over the Fed meeting could also hurt demand. The benchmark yields have increased from 1.60 percent at the beginning of May. "I think the higher yields will help international demand, the caution is whether we get a weaker auction because the Fed is coming out and nobody really wants to buy anything," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York. The Fed is expected to announce after its meeting that it will reduce its $85 billion-a-month bond purchases, though a weaker-than-expected employment report last Friday reduced expectations of how large any cut will be. Economists told Reuters after the latest jobs report they now expect the Fed to begin paring its purchases of Treasuries and mortgage-backed securities by $10 billion a month, down from the $15 billion median in Friday's primary dealer poll and a wider poll in August. The Fed bought $1.50 billion in bonds due from 2038 to 2043 on Wednesday as part of its ongoing purchase program.
- Russia criticizes EU sanctions, raps U.S. over Ukraine role |
- Israel says ready to extend short Gaza truce; many bodies pulled from rubble |
- First Ebola victim in Sierra Leone capital on the run
- Amazon's far-reaching ambitions, lack of profits, unnerve investors |
- Apple iPhones allow extraction of deep personal data, researcher finds