LONDON Dec 7 U.S. Treasury yields were broadly
steady on Friday, with investors reluctant to place big bets
before key jobs data and as an impasse on U.S. bduget talks
* U.S. 10-year bond yields were flat at 1.58
percent but remained near three week lows as concerns over the
United States' ability to avert a fiscal crisis early next year
favored safe-haven bonds.
* "Unless there's a really weak (jobs) number, I don't think
the market is going to break this 1.65-1.57 (percent) range, so
I think it could be a pretty dull session," one trader said.
* Non-farm employment is forecast to have increased by
93,000 last month after advancing 171,000 in October, according
to a Reuters survey of economists.
* But economists said that slowdown would reflect the impact
from Superstorm Sandy that battered the East Coast of the United
States in late October and, because of this one-off factor,
market reaction to the data would be limited.
* "We suspect this set of payroll numbers may be less market
sensitive than usual, largely because markets are uncertain
about the impact from the Superstorm," Philip Shaw, chief
economist at Investec said. "Any reasonable divergences away
from consensus will be explained by the effect of the
* Uncertainty over whether U.S. lawmakers will agree on a
deal to avert spending cuts and tax increases due to be
triggered in early 2013 has provided safe-haven debt with an
underlying bid, even as many in the market expect a deal to be
reached at the eleventh hour.
* The White House and Republicans in Congress dropped hints
that they had resumed low-level private talks on breaking the
* "We have taken a view that the fiscal cliff will probably
be averted. Whilst the headlines imply that there is no
progress, what seems to be happening behind scenes is a
fracturing of the Republican party and therefore a better chance
of an agreement over the next week," Shaw added.
* He said they were advising clients to be positioned for
"risk-on", meaning favoring equities over Treasuries.
* Borrowing costs were flat across maturities, with
five-year bonds yielding 0.60 percent and thirty-year
bonds yielding 2.77 percent.