November 20, 2012 / 2:15 AM / in 5 years

TREASURIES-Bonds steady in Asia after sliding on budget hopes

TOKYO, Nov 20 (Reuters) - U.S. Treasuries were steady in Asia on Tuesday after posting small losses the previous day on optimism that U.S lawmakers may reach a deal to avert the “fiscal cliff”, which threatens to push the U.S. economy into a recession.

* Leading U.S. lawmakers expressed confidence on Sunday that they could reach a deal to avert the “fiscal cliff” even as they laid down markers on taxes and spending that may make any agreement more difficult.

* The 10-year notes yielded 1.611 percent, almost unchanged from late U.S. levels but off its 2 1/2-month low of 1.556 percent hit on Friday.

* Optimism on the budget talk in Washington lifted U.S. shares on Monday, with the S&P 500 index rising 2.0 percent from Friday’s four-month low.

* The market hardly showed any response to Moody’s downgrading of France’s triple-A rating. “I don’t think that’s going to affect U.S markets much,” said a trader at a Japanese bank.

* The euro dipped about 0.3 percent on the news but U.S. stock futures have shown muted response so far.

* The immediate focus is on a speech by Federal Reserve Chairman Ben Bernanke in New York at 1215 local time (1715 GMT). Treasuries have been supported by speculation that the Fed is likely to unveil a new stimulus in December, when its Operation Twist is set to expire.

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