TOKYO Feb 26 U.S. Treasuries firmed in Asian
trading on Tuesday, with the benchmark yield dropping to its
lowest level in a month as political uncertainty following an
Italian election rekindled fears about the euro zone's debt
crisis and whetted investors' appetite for safe-haven debt.
* Italy's centre left won the lower house as widely
expected, but projections by Italian media indicate no party or
coalition will be able to form a majority in the upper house, or
* "Everyone thought that the worst was over in Europe, but
maybe there are still problems yet to come in Italy," said a
fixed-income fund manager at a Japanese asset management firm.
"We will be waiting for Bernanke later today for more
direction on U.S. monetary policy," he added.
* Federal Reserve Chairman Ben Bernanke will testify before
the Senate Banking Committee later in the session, and then
address the Housing Financial Services Committee on Wednesday.
Investors will be looking for signals that the U.S. central
bank will continue buying assets to support the economy.
* U.S. debt prices continued to be underpinned by concerns
about the impact of automatic U.S. government spending cuts set
to begin on Friday. Economists said these cuts worth $85 billion
would hurt the economy.
* The yield on 10-year Treasuries slipped to
1.851 percent in Asian trade on Tuesday, their lowest in a
month, from 1.862 percent in late U.S. trade on Monday, when
they marked their biggest one-day drop since November.
* The yield on 30-year Treasuries fell to 3.046
percent, from 3.060 percent on Monday.
* On the supply side, the Treasury will auction $35 billion
in five-year notes on Tuesday and $29 billion in seven-year
notes on Wednesday. It sold $35 billion in two-year notes on
Monday. All the auctions settle on Thursday, the last day of the
The Federal Reserve bought $3.31 billion in debt due 2020 to
2023 on Monday as part of its ongoing bond purchase programme
aimed at holding down long-term borrowing rates and reducing