* U.S. 30-year, 10-year yields touch one-week highs
* U.S. home prices flat in February
* U.S. consumer confidence slip in April
By Gertrude Chavez-Dreyfuss
NEW YORK, April 29 U.S. Treasury prices tumbled
for a second straight session on Tuesday, weighed by optimism
about the U.S. economy, with the Federal Reserve expected to
continue reducing its bond purchases and investors bracing for a
strong jobs report later this week.
With the world's largest economy seemingly on a stable
recovery path, the Fed, which begins its two-day meeting on
Tuesday, is expected to carry on tapering its asset buying, a
negative scenario for Treasuries. The Fed is also unlikely to
alter its forward guidance on interest rates.
Yields on U.S. 30-year bonds and benchmark 10-year notes hit
roughly one-week highs, also helped by the market's diminishing
focus on geopolitical tensions between Ukraine and Russia. The
United States imposed additional sanctions on Russia on Monday,
which some thought was too slight and would have little impact.
Volume was generally light on Tuesday with Japanese markets
closed due to a public holiday. Analysts said Japanese
investors, which are huge market participants, tend to buy
Treasuries on downticks.
David Thielke, interest rate strategist at Nomura Securities
in New York, said the sell-off in Treasuries was a combination
of several factors.
"We haven't seen any major healdines on the tensions in
Ukraine and nothing has really changed," said Thielke. "We saw
sanctions yesterday on Russia, but this is already the second
round, and we haven't seen any real backlash or major impact."
At the same time, Thielke said expectations on the U.S.
employment report, due out on Friday, are quite high.
A Reuters poll showed economist expect the U.S. economy to
have created 210,000 jobs in March.
In morning trading, the benchmark 10-year U.S. Treasury note
was down 10/32 in price to yield 2.71 percent, up
from 2.70 percent late Monday. Yields rose as high 2.73 percent,
the highest since April 24.
Prices of 30-year Treasury bonds fell 28/32 to
yield 3.50 percent, compared with 3.48 percent the previous
session. U.S. 30-year yields touched a peak of 3.52 percent, the
highest level since April 22.
The five-year note, meanwhile, slid 3/32, yielding 1.74
U.S. Treasury yields pulled back from their highs, however,
after a flat reading on U.S. home prices in February and a dip
in the consumer confidence index.
Later in the session, the Treasury will sell $15 bln in
2-year floating rate notes, while the New York Fed will purchase
$2.00 bln to $2.50 bln of May 2021 - February 2024 notes to
finish off the April buybacks.
Apple Inc is also in the spotlight in the bond
market. The tech giant is expected to raise between $8-$10
billion from its seven-tranche bond deal, market sources said on
Tuesday. One of the sources said the company was only expected
to price the dollar-denominated deal on Tuesday, amid
expectations the issuer will also target other currencies.
(Editing by Meredith Mazzilli)