LONDON, April 26 U.S. Treasuries gained in
Europe on Friday with the focus on a final update of a
closely-watched sentiment survey for April, likely to confirm
consumer spending was slowing and threatening to stymie economic
Traders are also looking to gross domestic product figures
due at 1230 GMT forecast to show the economy expanded at a 3.0
percent annual clip in the first quarter, accelerating from 0.4
percent in the fourth quarter.
Market participants said the backward-looking nature of the
figures may weaken their impact, with recent leading indicators
having painted a more downbeat picture.
The Thomson Reuters/University of Michigan survey's final
measure of consumer sentiment for April follows a preliminary
reading two weeks ago that showed a fall to 72.3 from the final
March figure of 78.6.
"The expectations are for a pretty good U.S. GDP reading,
but corporate sentiment is still weak, so the Michigan sentiment
reading will be in focus," said Ayako Sera, market economist at
Sumitomo Mitsui Trust Bank.
"In some ways, the sentiment reading is more of a focus than
the GDP report," she added.
U.S. 10-year T-notes were 4/32 higher in price
to yield 1.696 percent on Friday from 1.711 percent in late U.S.
trading on Thursday, moving closer to a more than four-month low
of 1.643 percent hit on Tuesday.
Most observers expect a robust Q1, followed by a weak Q2,
for economic activity, so that risks might be somewhat
asymmetrical for Treasuries, with a disappointment that would
actually be 'news'," Lloyds strategists said in a note.
"Having said that, upside risks are tempered by yields being
at the bottom of the 2013 range, with previous range bottom as
far as 1.55-1.60 percent: it is difficult to bet on such a move
to lows in the near future."
U.S. T-note futures were up 4/32 at 133-6/32 while
the 30-year T-bond was up 9/32 in price to yield
2.892 percent, down from 2.912 percent in late U.S. trade.
On Friday, the Bank of Japan held monetary policy steady as
It said in its semiannual economic and price report that it
would continue easing as long as needed to achieve 2 percent
inflation in a stable manner, a target it said it would likely
achieve during the latter half of the coming three-year period
covered in the outlook.
The BOJ's massive stimulus scheme unveiled on April 4 has
underpinned Treasuries, on speculation that Japan's life
insurers will boost their holdings of foreign bonds in the $3
trillion in assets they hold.
But insurers' annual investment plans for this fiscal year
that began this month suggest that they will make no drastic