LONDON Nov 27 U.S. bond prices took back
overnight losses in Europe on Tuesday, as relief faded that
Greece will get its next loan tranche, worries over U.S. fiscal
challenges resumed and the attraction of safe havens re-asserted
* Greece's international lenders agreed to cut the country's
debt by 40 billion euros to reduce it to 124 percent by 2020.
The deal paves the way for the release of further aid to Athens,
removing the risk of near-terms default.
* The relief did not cause major damage to safe-haven
assets, however. The risk of recession-inducing, mandatorytax
hikes and spending cuts kicking in next year in the United
States was still providing support.
* U.S. 10-year yields were last 1.2 basis points
lower on the day at 1.6540 percent, off highs of just below 1.68
percent hit in the Asian session.
* "There was some relief following the deal, but it was
brief as the outcome was expected, and I guess we're now
focusing on the other deal that needs to be reached this year
(the budget deal in the U.S.)," one trader said.
* Analysts said the limited reaction was also caused by
scepticism that the measures to cut Greek debt would work. The
most immediate risk was that investors may not want to take part
in a debt buy-back that needs to be completed before the
International Monetary Fund can release its share of aid.
* "The market is still mulling over the details," RIA
Capital Markets strategist Nick Stamenkovic said. "It is taking
a bit of a wait-and-see stance,
* Later on Tuesday, the U.S. Treasury Department will offer
$35 billion of two-year notes, as part of this
week's $99 billion in debt sales. It will be followed by $35
billion of five-year notes on Wednesday and $29
billion of seven-year notes on Thursday.