| NEW YORK
NEW YORK Dec 20 U.S. Treasuries prices rose on
Thursday as investors stuck to safe-haven government bonds on
the view fiscal talks in the United States seem to be losing
Benchmark 10-year Treasury notes rose 4/32,
their yields easing to 1.79 percent from 1.80 percent late on
In contrast, stocks opened flat on Wall Street.
The 10-year Treasury yield rose to 1.847 percent on Tuesday,
its highest in about two months, on rising expectations the
White House and Congress were moving closer to reaching a deal
on the budget.
But on Wednesday President Barack Obama said he would veto
the Republicans' proposal to avoid some of tax hikes and
spending cuts due early next year.
"The fiscal cliff news didn't sound particularly
constructive. Things deteriorated so that's obviously given
Treasuries a bid," a trader said.
Economic data released early on Thursday were mixed for
bonds. The final revision to third-quarter gross domestic
product (GDP) reflected better consumption, a negative for
safe-haven bonds; but investment in equipment and software was
revised lower, favoring bonds.
News from the Labor Department that new jobless claims rose
in the latest week was slightly supportive for bonds.
The labor market story, a tale of whether the glass is half
empty or half full, is not strong enough to push bond prices
down and yields higher and assures a continuation of the Federal
Reserve's accommodative - and bond-bullish - monetary policy.
"Our view is that the unemployment rate will remain well
above 7 percent through the coming year and well above the Fed's
numerical target of 6.5 percent," said Tanweer Akram, senior
economist, global rates, fixed income at ING Investment
Management in Atlanta, Georgia.
Such forecasts are another reason many investment managers
and trading strategists say the current 10-year yield - at 1.80
percent - is at the upper end of its trading range and could
move lower, especially if the austerity package of tax hikes and
spending cuts goes into effect next year with no amelioration.