* Putin outlines ceasefire plan; Ukranian PM calls it
* U.S. corporate supply will be major factor in September
(Recasts with yields falling, updates comment and prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, Sept 3 Benchmark U.S. Treasury debt
yields fell from three-week highs on Wednesday, reversing
earlier gains, as hopes over a proposed move to end fighting
between Russia and Ukraine were clouded by doubts that peace
Gains in Treasury prices, which move inversely to yields,
were led by the U.S. 30-year bond, driving its yield down from
While Russian President Vladimir Putin outlined plans for a
ceasefire in eastern Ukraine on Wednesday, Ukraine's prime
minister, Arseny Yatseniuk, dismissed the proposal. Yatseniuk
said Russia's plan is a "deception" on the eve of a NATO summit
that will discuss Ukraine. He added in a harshly worded
statement: "The real plan of Putin is to destroy Ukraine and
restore the Soviet Union."
"There's still quite a bit of uncertainty happening in
Ukraine," said Tom di Galoma, head of fixed-income rates and
credit trading at ED&F Man in New York.
"It looks to me that they floated a soft ceasefire because
the American president is in Estonia and I think they are afraid
that NATO is going to get together, so Putin has pulled back
temporarily. But this conflict would go on in my view."
In late trading, U.S 10-year Treasury notes were
up 3/32 in price to yield 2.40 percent, down from a yield of
2.42 percent late Tuesday. Yields earlier hit 2.46 percent, the
highest level since Aug 13.
The U.S. 30-year Treasury bond was up 12/32 in
price to yield 3.15 percent, down from 3.17 percent on Tuesday.
Yields climbed to 3.21 percent earlier in the session, a
Di Galoma said that anytime Treasury debt prices cheapen,
investors will buy them. "Investors continue to need duration,"
Earlier on Wednesday, Treasury yields were supported by a
slew of U.S. corporate bond supply in September, after a quiet
summer. There were about $21 billion in U.S. corporate bond
issues announced on Tuesday and more new deals were identified
on Wednesday, including a $1.25 billion bond issue from Lowe's
U.S. corporate bond supply have pushed the entire yield
spectrum higher, said David Keeble, global head of interest
rates strategy at Credit Agricole in New York, adding that
supply pressures will continue to underpin yields.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Nick
Zieminski and Leslie Adler)