LONDON, April 3 U.S. Treasuries held steady in
Europe on Wednesday, after slipping the previous day when
anxiety about Cyprus ebbed and expectations grew for a solid
recovery in U.S. employment.
Treasuries were seen rangebound before a European Central
Bank meeting on Thursday when policymakers are expected to keep
rates at a record low 0.75 percent but to try to calm investor
fears of the euro zone crisis flaring up again after Cyprus's
bailout terms rattled investors.
The U.S. 10-year T-note yield was last at 1.86
percent, unchanged from late New York trade. It rose about 3
basis points on Tuesday after hitting a two-month low of 1.823
"The market seems to be trading sideways more than anything.
You've got headline risk globally as you have the ECB meeting
and the risk is that they could be dovish and then you have the
non-farm payrolls on Friday," a trader said.
Investors will get a first look at labour demand for March
with the release later on Wednesday of data on private sector
hiring payrolls by processor ADP before the non-farm payrolls
report on Friday.
Although weak U.S. manufacturing figures on Monday helped to
drive 10-year yields to a two-month low, investors are expecting
the non-farm payrolls data, the most important event of the
week, to show a net gain of 200,000 in March, well above its
trend since the U.S. economy recovered from the 2008 financial
Nevertheless, Treasuries were underpinned by expectations
the Federal Reserve will keep buying bonds for the time being to
knock down unemployment further.
"U.S. bond yields also look attractive, comparatively
speaking, as yields on Japanese and German bonds are falling
sharply," said a trader at a Japanese bank.
The 10-year Japanese government bond yield is flirting with
10-year lows near 0.5 percent on hopes of aggressive monetary
easing by the Bank of Japan. German Bunds yield about 1.31
percent, not far from their eight-month low near
1.25 percent hit last week on worries about Cyprus.