LONDON, March 25 U.S. debt prices fell on Monday
after Cyprus agreed a last-gasp deal to prevent the collapse of
its banking sector, cooling demand for the safety of
Cyprus reached a deal with international lenders to secure a
10 billion euro bailout hours before a deadline, prompting some
selling from investors who had bought Treasuries last week for
their safety and liquidity when talks were struggling.
"The general theme today is risk-on so the market is selling
off here more than anything else," a trader said.
"We're seeing dribs and drabs of buying going through as
guys look to close out their short positions but otherwise the
bias is for lower (prices)."
Treasury futures fell 21/64 to 131-06/32 and cash
market 10-year yields sat in the middle of the 2013
trading range at 1.96 percent -- up 4 basis points on the day.
Without major economic data due on Monday the rest of the
session was likely to be influenced by technical chart levels
with yields rising towards the two-percent barrier although this
levels was expected to remain unbroken.
UBS said momentum indicators showed a slight bias towards a
rise in Treasury futures, and falls were likely to be contained
by support levels close to current prices.
"The first support focus for any correction is marked by the
38 percent retracement of the latest recovery at 131-01/32,
which is under test again so far this morning," said Richard
Adcock, technical analyst at UBS in a note to clients.
(Reporting by William James/editing by Chris Pizzey, London MPG
Desk, +44 (0)207 542-4441)