June 19, 2014 / 5:45 PM / 3 years ago

TREASURIES-Prices fall after weak TIPS auction

(Rewrites to reflect market's shift to losses from morning
gains, TIPS auction)
    * Treasury sells $7 bln 30-year TIPS to weak demand
    * Yields rise as invstors reposition after Fed meeting

    By Karen Brettell
    NEW YORK, June 19 (Reuters) - U.S. Treasuries prices
extended losses on Thursday after the United States had to pay
more to sell $7 billion in new 30-year Treasuries
Inflation-Protected Securities (TIPS).
    The TIPS were sold at a high yield of 1.116 percent, around
3 basis points higher than where the debt traded before the
    "It was much weaker than we thought," said Rick Klingman, a
Treasuries trader at Societe Generale in New York.
    The weakness came after bonds rallied on Thursday morning as
investors covered bearish Treasuries positions and readjusted
bets following the Federal Reserve's relatively dovish statement
from its June meeting on Wednesday.
    "The shorts are reduced and people are left long after that
TIPS auction, so there is a little bit of hedging," Klingman
    The benchmark 10-year U.S. Treasury note tumbled
 10/32 in price and its yield rose to 2.63 percent from 2.57
percent at 8:55 a.m (1255 GMT) on Thursday.
   The 30-year bond dropped 1-6/32 in price, pushing
its yield to 3.47 percent, up from 3.40 percent at 8:55 a.m
(1255 GMT). 

 (Editing by Jan Paschal)

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