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TREASURIES-Prices near flat as Wednesday data, Fed eyed
July 30, 2013 / 7:12 PM / 4 years ago

TREASURIES-Prices near flat as Wednesday data, Fed eyed

* Second-quarter GDP, Fed statement, refunding details on
Wednesday
    * Treasury refunding details might include selling fewer
bonds
    * Fed statement to be scrutinized for timing of tapering
    * July U.S. jobs report due Friday seen as key to trading

    By Ellen Freilich and Luciana Lopez
    NEW YORK, July 30 (Reuters) - Prices of U.S. Treasuries
traded nearly flat on Tuesday ahead of a number of major events
on Wednesday, including U.S. economic growth data, a Treasury
refunding announcement and the conclusion of a two-day Fed
meeting.
    With so much key information coming later in the week,
trading both on Monday and Tuesday has held to a tight range,
with investors wary of taking on major positions. 
    "We are definitely in a wait-and-see mode this week," said
Wilmer Stith, co-manager of the Wilmington Broad Market Bond
Fund in Baltimore. 
    Markets are especially keen for clarity on when the U.S.
Federal Reserve could slow or even stop its $85 billion per
month in buying of Treasuries and mortgage-backed securities, 
stimulus aimed at lowering unemployment.
    Fed speakers, including Chairman Ben Bernanke, have hinted
recently at a pullback, sending yields soaring from May. 
    Wednesday's Fed statement at the end of the bank's policy
meeting could hint at a slower buying pace to come, as well.
    "We get the statement from the FOMC tomorrow and that will
lay out - for at least 48 hours until we get the employment data
on Friday - what the committee's ideas are with regard to
tapering the Fed bond purchases," Stith added.
    Since the timing and pace of cuts to bond buying depend on
the health of the world's biggest economy, the market is focused
on data releases such as the second-quarter gross domestic
product report due at 8:30 a.m. (1230 GMT) on Wednesday and the
July U.S. employment data, due at the same time on Friday.
    The Treasury's quarterly refunding announcement on Wednesday
has also attracted unusually intense interest.  
 
    Some analysts expect the Treasury to cut coupon-bearing debt
sales for the first time since September 2010 as a shrinking
federal budget deficit reduces funding needs.
    Traders expect the first cuts in issuance to be in the
shortest maturities. Less short-term debt should support prices
and keep borrowing costs down for the federal government, whose
deficit, while on track to shrink this year, remains elevated
from its level before the 2007-2009 recession.
    People are most focused on "the size of the three-year note
issuance and the Treasury's guidance for 2s and 5s throughout
the quarter," said Thomas Simons, money market economist at
Jefferies & Co in New York.
    The Treasury Department will release its quarterly refunding
details on Wednesday at 8:30 a.m. (1230 GMT).
    The Conference Board's consumer confidence index, which
showed consumers' improved view of their current situation was
undercut by less confidence in the outlook six months from now,
gave slight support to Treasuries.
    S&P/Case-Shiller home price data released Tuesday had little
market impact.
    Markets are also watching ADP's private-sector employment
report on Wednesday and the Institute for Supply Management's
manufacturing index on Thursday. 
    The benchmark 10-year Treasury note dipped 2/32
in price to yield 2.604 percent from 2.61 percent late on
Monday.
    As part of its ongoing stimulus, the Federal Reserve Bank of
New York said it purchased  $1.464 billion in Treasury coupons
with maturities ranging from February 15, 2036 to November 15,
2042.

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