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TREASURIES-T-notes slip as Spain bailout talk hits safe-havens
October 2, 2012 / 9:51 AM / 5 years ago

TREASURIES-T-notes slip as Spain bailout talk hits safe-havens

LONDON, Oct 2 (Reuters) - Treasury prices edged lower in
European trading on Tuesday, tracking a fall in low-risk euro
zone bonds as Spain's apparent willingness to seek a bailout saw
investors prefer riskier assets.
    
    * With little in the way of economic data to digest and the
focus on Friday's U.S. non-farm payrolls report, the euro zone's
battle against its debt crisis dominated trading with Spain
signalling it may be ready to ask for a bailout. 
    
    * That lifted appetite for higher-yielding bonds, such as
those issued by Spain, at the expense of safe-haven investments
such as U.S. Treasuries, where futures prices slipped
5/64 to 133-32/64 - albeit with only low volumes to back the
move. 
    
    * "We're hostage to what people think about what's going on
in the euro zone. The Spanish appear to be edging towards a
bailout but Germany are saying 'hold on'... the result is Bunds
are off a bit and Treasuries are down a bit in sympathy," said
Marc Ostwald, strategist at Monument Securities in London. 
    
    * Traders said prices were likely to remain within a fairly
tight band until Friday's closely watched payrolls report,
forecast to show 113,000 jobs were added in September. 
    
    * Technical charts showed the recent rally in Treasury
futures, which rose two full points in the last two weeks of
September, may be running out of steam and vulnerable to further
falls.
    
    * "We are asking that 133-01/32 is taken out to add weight
to the idea that we've topped out once more," said Clive
Lambert, technical analyst at Futurestechs, referring to the
support offered by the 38 percent retracement of the September
rally.

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