LONDON Nov 21 U.S. Treasuries paused in Europe
on Wednesday, stabilising after a sharp sell-off this week as
market players squared positions ahead of the Thanksgiving
* Treasury yields have come under pressure this week on
optimism that U.S. lawmakers in Washington will strike a deal to
avoid the "fiscal cliff" of spending cuts and tax hikes due to
take effect early next year.
* "The markets are maybe getting a little bit ahead of
themselves by pricing in a fiscal cliff deal, the question is
just how much of a drag on growth any deal they agree is going
to have," a trader said. "What we're seeing this morning is some
position squaring into the end of the week with Thanksgiving
tomorrow," he added.
* Benchmark 10-year Treasury yields were a basis
point lower at 1.66 percent, having risen around 8 basis points
this week, with T-Note futures unchanged at 133-39/64.
* Federal Reserve Chairman Ben Bernanke said 2013 would be a
"very good year" for the U.S. economy if politicians reach a
quick agreement but some analysts were sceptical any compromise
would go far enough.
"It seems the uncertainty associated with the range of
fiscal outcomes during the tax cliff negotiations and beyond is
underappreciated by investors," Barclays strategists said in a
note. "It seems unlikely the negotiations will produce a
comprehensive solution that will significantly reduce the
macroeconomic risks related to fiscal and monetary policy for
* With U.S. markets closed on Thursday, the week's data
releases come thick and fast on Wednesday with jobless claims
data to be issued a day early.