LONDON Jan 11 U.S. Treasuries steadied in
Europe on Friday as concerns about faltering monetary stimulus
from China offset the impact of a slightly more upbeat euro zone
outlook from the European Central Bank.
U.S. debt prices resumed last week's falls on Thursday after
the ECB noted some signs of economic stabilisation, dampening
expectations of further rate cuts.
But an acceleration in China's consumer inflation rate
narrowed the scope for further monetary easing, causing selling
pressure in stock markets and supporting safe-haven instruments
such as U.S. debt.
U.S. 10-year T-note yields were 0.7 basis points
lower at 1.8923 percent, while T-note futures were flat
"There seems to be good support around 1.90 percent in
10-years," RIA Capital Markets bond strategist Nick Stamenkovic
said. "We had ... disappointing inflation data out of China and
the European equity market has run out of steam this morning -
maybe a bit of profit taking - consequently Treasuries have
recouped some of their losses."
The 10-year yield has climbed more than 15 bps so far in
January, having gotten a lift after U.S. policymakers reached a
deal to avoid large scale fiscal-tightening that could have
pushed the economy back into recession.
The rise gained added momentum after minutes of the Federal
Reserve's December meeting, released last week, raised concern
that the Fed could stop its asset purchases, known as
quantitative easing, before the end of the year.