SINGAPORE Feb 19 U.S. 10-year Treasuries
slipped on Tuesday but their losses were limited due to caution
ahead of a forthcoming election in Italy and concerns about the
potential economic impact of looming U.S. budget cuts.
* Ten-year notes fell 2/32 in price to yield 2.012 percent
in Asia, up roughly 1 basis point from late U.S.
trade on Friday. The U.S. bond market was closed on Monday for
* In the near term, Treasuries could find some support due
to worries about political uncertainty in Italy before elections
on Feb. 24-25, and concerns about the potential economic impact
of U.S. spending cuts that are due to kick in on March 1, said
Tomohisa Fujiki, interest rate strategist for BNP Paribas in
"Our view is that bond yields are more likely to head
lower," Fujiki said, adding that the 10-year Treasury yield
could drop to levels around 1.85 percent by the end of this
* If Congress fails to act, about $85 billion in
across-the-board spending cuts will begin on March 1, and
analysts say the austerity could hurt the U.S. economy.
* "You don't sell Treasuries when the markets are a bit
uneasy," said a trader for a European brokerage house in Tokyo,
adding that the market was likely to stay very cautious ahead of
the Italian elections.
Market players are worried Italy's Feb. 24-25 vote could
fragment parliament and hamper the future government's reform