* Focus on U.S. 10-year auction
* Stocks trade lower, help bonds
By Gertrude Chavez-Dreyfuss
NEW YORK, June 11 U.S. Treasury debt prices
edged higher on Wednesday after three days of selling, helped by
lower risk appetite, with Wall Street shares trading weaker and
overall caution ahead of a 10-year note auction later in the
Late on Tuesday, the World Bank trimmed its global growth
forecast, saying a confluence of events, from the Ukraine crisis
to unusually cold weather in the United States, dampened
economic expansion in the first half of the year.
The news weighed on U.S. stock index futures earlier and
helped bonds recover a little bit, partly offsetting selling
ahead of the $21 billion U.S. 10-year note auction later on
Wednesday. In general, however, there was little activity in the
market until the 10-year note sale.
"I think investors are worried about the 10-year auction -
where is demand going to come from," said Tom di Galoma, head of
fixed income rates at ED&F Man in New York.
"We had auctions that tailed for the fist time - the 2s, 5s,
and 7s all tailed two weeks ago. People are somewhat guarded
that we may see a continuation of that trend of just a general
lack of demand."
In midmorning trading, 10-year notes were up
4/32 in price to yield 2.622 percent, from 2.648 percent late on
Traders said that with the auction ahead, investors may push
10-year yields up to 2.7 percent
U.S. 30-year bonds rose 9/32 in price to yield 3.449 percent
, from 3.481 percent late Tuesday.
Recent auction performance in the U.S. 10-year sector has
been strong, driven by domestic investment funds. On a
three-month moving average basis, their demand has increased
since February to 48 percent. That has partially offset the
decline in foreign investor participation since February.
(Editing by Jonathan Oatis)