LONDON Jan 15 U.S. Treasury prices rose on
Tuesday supported by the Federal Reserve's purchase of
long-dated bonds, with investors looking at a bout of data due
later for insight into the country's economic health.
* On Monday, the Fed bought $1.47 billion in Treasuries with
maturities ranging from February 2036 to November 2042, part of
its $45 billion monthly purchases of government securities aimed
to lower unemployment.
* The bond-purchases were supportive, with 10-year yields
falling 1.8 basis points to 1.83 percent and 30-year
yields easing 2.1 bps to 3.02 percent.
* "We are back to fundamentals later today with retail sales
and PPI (producer price data)... But it seems that the Fed
coming in and buying paper, without any supply, has been enough
(for the market) to break through some resistance points," Craig
Collins, a trader at Bank of Montreal said.
* Investors would look at retail sales, manufacturing and
inflation numbers later in the day to gauge the health of the
world's largest economy.
* Having broken through resistance at 1.86 percent, the
market was now trading around the next resistance level of 1.825
percent, Collins said.
* "So the buying this morning has gotten us up to the next
resistance point and if we breach this, then we target 1.75
percent," he added.
* The rise in bond prices also came as Federal Reserve
Chairman Ben Bernanke on Monday warned the economy was still at
risk from political gridlock over the deficit and gave no clear
hints on when the Fed would curb its aggressive bond purchases.
* Fed minutes this month showing officials concerned about
the potential risks of ultra-easy monetary policy triggered
market speculation that it could be unwound this year, prompting
a sell-off in U.S. Treasuries.
* "I don't think there is anything new on Bernanke, I think
people just overreacted to the minutes," a second trader said.