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TREASURIES-10-year notes slightly lower after upbeat China PMI
December 3, 2012 / 6:46 AM / 5 years ago

TREASURIES-10-year notes slightly lower after upbeat China PMI

TOKYO, Dec 3 (Reuters) - U.S. 10-year Treasuries prices slipped slightly in Asia on Monday as risk appetite rose on an upbeat Chinese manufacturing survey, though continuing worries about the U.S. fiscal situation limited losses.

* The pace of China’s manufacturing activity quickened for the first time in 13 months in November, with the final reading for the HSBC Purchasing Managers’ Survey (PMI) rising to 50.5 after seven quarters of slowing economic growth.

* Treasury Secretary Timothy Geithner said on Sunday that he “can’t promise” that the United States won’t go over so-called fiscal cliff of $600 billion worth of tax increases and reduced outlays scheduled to automatically take effect next year. He insisted it is up to congressional Republicans to avert it.

* “We await the latest developments in the U.S. budget talks, and until then, yields probably won’t move much,” said a fixed-income fund manager at a Japanese trust bank.

* Yields on 10-year Treasuries inched up to 1.618 percent on Monday in Asian trade from 1.616 percent in late U.S. trade on Friday.

Benchmark yields dipped by seven basis points in November, their largest monthly fall since July, as fiscal fears bolstered bonds.

* Yields on 30-year Treasuries rose slightly to 2.811 percent from 2.810 percent on Friday.

* On the U.S. data front on Friday, spending dropped for the first time in five months in October, while a private report showed business activity in the upper Midwest region barely grew in November.

* On the supply side, the U.S. Federal Reserve bought $1.85 billion in Treasuries that mature in Feb. 2036 through Nov. 2042 under its “Operation Twist” stimulus program aimed at bringing down long-term rates.

The Fed bought about $16.77 billion of longer-dated U.S. debt in six operations last week.

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