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TREASURIES-Bonds firm in Asia on Cyprus worries, soft consumer data
March 27, 2013 / 5:24 AM / 4 years ago

TREASURIES-Bonds firm in Asia on Cyprus worries, soft consumer data

TOKYO, March 27 (Reuters) - U.S. Treasuries were firm in Asia on Wednesday after having gained the previous day on worries about the ramifications from a rescue deal for Cyprus and following weak U.S. consumer sentiment data.

* The yield on 10-year notes stood at 1.916 percent , little changed from late U.S. levels on Tuesday.

* Treasuries prices gained on Tuesday despite a rise in stocks because the Cyprus rescue plan, imposing heavy losses on depositors in the country, spurred worries depositors and bond investors may pull money out of some other euro zone countries perceived to be weak, likely to the benefit of Treasuries.

* Also helping Treasuries was surprisingly weak U.S. consumer sentiment data, although other data pointed to a fairly robust economic picture.

* The Conference Board’s index of consumer attitudes fell to 59.7 from a downwardly revised 68 in February, sharply below economists’ expectations of 68. February was originally reported as 69.6.

* A likely culprit was the $85 billion in automatic government spending cuts known as the sequester, which was triggered at the beginning of the month when politicians failed to reach an agreement on a new deal to cut deficits.

* “The data showed the spending cuts are hurting consumer sentiment. Considering the impact of spending cuts, there’s downside risks to economic data in coming months. We think the 10-year yield will fall to around 1.8 percent,” said Shinichiro Kadota, fixed income analyst at Barclays.

* The soft consumer data helped Treasuries recover losses triggered by upbeat manufacturing and housing data. Durable goods orders rose 5.7 percent in February, beating expectations.

* The S&P/Case Shiller house price index rose 8.1 percent in January from a year ago, its biggest rise since June 2006.

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