SINGAPORE, June 7 U.S. 10-year Treasuries held
firm in Asia on Friday before the release of jobs data which
could shed light on whether the Federal Reserve will soon scale
back its aggressive monetary stimulus.
* Ten-year notes rose 4/32 in price to yield 2.064 percent
. The 10-year yield was down 1 basis point on the
day, but remained above Thursday's intraday low of 1.999
* The United States probably added 170,000 jobs in May, with
the unemployment rate holding steady at a lofty 7.5 percent,
according to a Reuters survey of economists.
Some other economic indicators this week have disappointed
markets, including a report by payrolls processor ADP showing
U.S. private employers added fewer jobs than expected in May.
Market players say a particularly strong payrolls number
could push the 10-year Treasury yield higher, but a poor figure
could mean a slip in yields, perhaps even back to levels below 2
* If the jobs data were to come in weak and show an increase
in jobs of say, 120,000 to 130,000, the 10-year Treasury yield
will probably fall back to levels below 2 percent, said Tomohisa
Fujiki, interest rate strategist for BNP Paribas in Tokyo.
But even in that case, Treasuries are unlikely to enter an
extended rally that pushes the 10-year yield back to levels near
1.6 percent, since the market could start factoring in the
possibility of the Fed tapering its monthly bond purchases if
the outlook for inflation picks up, Fujiki said.
The 10-year yield had hit its year-to-date low of 1.614
percent in early May but later rebounded and hit a 13-month high
of 2.235 percent in late May as Treasuries retreated on
speculation that the Fed could start scaling back its $85
billion in monthly asset purchases later this year.