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TREASURIES-Yields fall as U.S. data disappoints
June 4, 2014 / 1:10 PM / 3 years ago

TREASURIES-Yields fall as U.S. data disappoints

* Yields fall as jobs disappoint, deficit widens
    * Short-covering before Thursday's ECB meeting adds bid
    * Fed to buy $0.85 bln - $1.10 bln bonds due 2036-2044

    By Karen Brettell
    NEW YORK, June 4 (Reuters) - U.S. Treasuries yields fell on
Wednesday after weaker-than-expected jobs data indicated that
second-quarter growth may not be as strong as some had expected,
and as investors covered some bearish bets heading into
Thursday's highly anticipated European Central Bank meeting.
    U.S. companies hired 179,000 workers in May, marking the
lowest monthly increase since January and falling short of
market expectations, a report by a payrolls processor showed on
Wednesday. Economists surveyed by Reuters forecast the ADP
National Employment Report would show a gain of 210,000 jobs in
May. 
    The U.S. trade deficit also widened to its highest level in
two years in April as imports hit a record high, suggesting
trade could be a drag on second-quarter growth. 
    The fall in Treasuries yields is "a reflection of a bit
softer data," said Ian Lyngen, a senior government bond
strategist at CRT Capital in Stamford, Connecticut.
    Benchmark 10-year notes were last up 8/32 in
price to yield 2.5 percent, down from 2.59 percent late on
Tuesday. Thirty-year bonds gained 14/32 in price to
yield 3.42 percent, down from 3.43 percent.
    Some investors covering bets that yields would rise also
added to Wednesday's bid, traders said. Ten-year note yields
have surged from an 11-month low of 2.40 percent last Thursday
as investors reset shorts.
    The next focus for the market is Thursday's ECB meeting,
where the central bank is expected to cut interest rates and
announce other measures to help stimulate growth in the region.
Some investors are wary, however, that it may disappoint. 
    "Everyone's focused on the ECB and they do have a history of
underwhelming the market when it comes to actually delivering
changes on monetary policy," said Lyngen.
    The Federal Reserve will buy between $0.85 billion and $1.10
billion in bonds due from 2036 to 2044 on Wednesday as part of
its ongoing purchase program.
    

 (Editing by Meredith Mazzilli)

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