TOKYO Feb 14 U.S. Treasuries were on the
defensive on Thursday, with the 10-year yield briefly touching a
10-month high in Asia after a tepid sale of 10-year debt the
previous day stoked concerns of a further fund shift out of
bonds to riskier assets.
* On Wednesday, the Treasury sold $24 billion in 10-year
notes at a high yield of 2.046 percent, above what the market
* The yield on the new notes rose to as high as 2.061
percent in Asian trade, the highest for the current
10-year notes since April last year, rising above the Feb. 4
high of 2.0590 percent.
* Treasury yields could make a clear break above their
recent trading ranges if an upcoming auction of $16 billion
30-year bonds later in the day also fails to attract strong
demand. The 30-year yield stood at 3.238 percent,
just under a 10-month high of 3.254 percent hit last week.
* The rise in yields came even after data showed on
Wednesday U.S. retail sales barely rose in the month as tax
increases and higher gasoline prices restrained spending.
* Many investors expect global growth to gain momentum this
year as the euro zone shows some sign of stability while the
Chinese economy rebounds, reducing the attraction of bonds.
* Investors are now focused on a package of automatic
spending cuts, which are due to kick in on March 1 unless
lawmakers agree on alternative budget measures or delay
negotiations to a later date.
* While concerns about spending cuts could prop up
Treasuries for now, some traders are of the view the market may
have already priced in these cuts to some degree.
* Senate Republican leader Mitch McConnell said on Tuesday
he expects across-the-board cuts, known as sequester, to begin