TOKYO Dec 12 Benchmark U.S. Treasuries firmed
slightly in Asia on Wednesday, underpinned by expectations that
the U.S. Federal Reserve will announce more easing steps at the
conclusion of its policy meeting later in the session.
* The Fed is expected to announce a new round of Treasury
securities purchases after its two-day meeting. Half the
respondents in a Reuters poll on Friday said they expected $45
billion per month.
* Yields on 10-year Treasuries inched down to
1.650 percent on Wednesday in Asian trade, compared to 1.652
percent in late U.S. trade on Tuesday.
* Yields on 30-year Treasuries also fell
slightly to 2.836 percent from 2.838 percent on Tuesday.
* "Expectations of more Fed easing as well as the
continuation of talks on the 'fiscal cliff' budget situation
make it difficult to sell U.S. debt," said a fixed-income fund
manager at a Japanese asset management firm.
* The White House and U.S. House of Representatives Speaker
John Boehner exchanged new proposals in the talks to avert the
$600 billion worth of tax increases and reduced outlays
scheduled to automatically take effect next year.
A group of high-profile chief executives urged President
Barack Obama and Republican congressional leaders on Tuesday to
reach a deal to end the stalemate.
* Strategists at Societe Generale recommended keeping long
positions in U.S. Treasuries ahead of the Fed outcome.
If there is no substantial progress towards resolution of
the fiscal cliff prior to the Fed' policy announcement, the
10-year yield is likely to break out of the 1.58 percent to 1.75
percent range on the downside, they said in a note to clients.
It could fall back towards 1.50 percent in the coming days if
the fiscal cliff negotiations bog down, they added.
* On the supply side, the Treasury will sell $21 billion in
10-year notes on Wednesday and $13 billion in 30-year bonds on
On Tuesday, it sold $32 billion of three-year notes
at a high yield of 0.327 percent, with a
below-average bid-to-cover ratio of 3.36.