* Absence of short-covering caps price gains
* Decline in U.S. stocks supports safe-haven bids
* Investors focus on ECB meeting, Ukraine
By Sam Forgione
NEW YORK, May 20 U.S. Treasuries traded mostly
flat on Tuesday as recent short-covering stalled, though
declines in Wall Street stocks drove some safe-haven support and
Analysts said traders' moves to cover bets against
Treasuries in response to falling interest rates had largely
been exhausted. The short-covering was partly responsible for
benchmark 10-year Treasury yields hitting multi-month lows last
"There is probably no more short-covering needed," said
Jeffrey Young, U.S. interest rate strategist at Nomura
Securities International in New York. He added that traders were
reluctant to take bullish bets on Treasuries.
"Shorts have been burned a lot, and you don't spend the last
week and a half covering just to get back in," he said.
Traders also said that an absence of U.S. economic data kept
prices flat, along with a wait-and-see period ahead of key
events, including the European Central Bank's next policy
meeting in early June and upcoming elections in Ukraine.
Prices on 30-year Treasuries bonds were flat,
with yields at 3.385 percent. Benchmark 10-year U.S. Treasury
notes prices were last up 1/32 to yield 2.532
percent, from a yield of 2.536 percent late Monday.
Longer-dated Treasuries bonds pared early losses after a
decline in U.S. stocks drove some safe-haven bids.
"There's a little bit of risk-off sentiment given the
declines in stocks," said Kim Rupert, managing director for
fixed income at Action Economics in San Francisco.
She noted that geopolitical risks surrounding Ukraine
remained an "undercurrent" that drove some safe-haven support
On Wall Street, the S&P 500 and Dow Jones industrial
average traded down 0.15 percent, as investors assessed
some of the final corporate results of earnings season.
(Reporting by Sam Forgione; Editing by Dan Grebler)