SINGAPORE, Nov 21 (Reuters) - U.S. 10-year Treasuries struggled to regain ground in Asia on Wednesday after retreating the previous day on optimism that lawmakers will reach a deal to avoid a fiscal crisis that could dent economic growth.
* Ten-year notes held steady in price with a yield of about 1.668 percent. The 10-year yield had hit a two-month low of 1.556 percent last Friday, but has risen since then.
* Treasuries have come under pressure this week after leading U.S. legislators expressed confidence on Sunday that they could reach a deal to avert the “fiscal cliff” of spending cuts and tax hikes due to take effect in early 2013.
Data showing that U.S. housing starts rose to their highest rate in more than four years in October added to a sell-off in Treasuries on Tuesday, when the 10-year yield rose about 5 basis points.
* Market positioning at this point does not seem tilted too heavily toward being long Treasuries, suggesting that the potential for any long liquidation and further weakness in Treasuries might be limited in the near-term, said a trader for a U.S. brokerage in Tokyo.
“I don’t think that dips from here will become that big,” the trader said.