LONDON Dec 27 U.S. Treasury prices fell on
Thursday, as investors focused on last-ditch efforts by U.S.
lawmakers to avoid major fiscal tightening early next year.
* Ten-year U.S. Treasury yields rose 1.9 basis
points to 1.77 percent, while 30-year yields were up
2.6 bps at 2.95 percent.
* President Barack Obama will try to revive budget crisis
talks - which stalled last week - when he returns to Washington
on Thursday after cutting short his Christmas holiday, but the
White House and Republicans are still far apart.
* "As we approach the end of the (year), we could get
somewhat lower, something like 1.70 or 1.65 percent," said
Philip Marey, strategist at Rabobank, referring to the 10-year
* "Still, the big market panic is not there yet. I think we
will get there if we don't get a deal in the middle of January,"
* Investors had been hoping that U.S. lawmakers would
achieve a deal before Christmas or the end of the year to stop
the automatic triggering of a bout of tax hikes and spending
cuts in early 2013. As time runs out, there are still some
investors clinging onto hopes that some form of compromise will
eventually be struck early next year.
* "It's all about the fiscal cliff and we are just not going
to have any clarity on that, so I think we stay in a reasonably
well-defined range between 1.82 and 1.70 percent," one trader
* But he added that the fact that 10-year yields were
consistently closing above a 200-day moving average of 1.76
percent was "probably a bearish development for bonds, as in
yields might move higher."