August 21, 2012 / 3:11 AM / 5 years ago

TREASURIES-US 10-yr notes firmer after finding chart support

SINGAPORE, Aug 21 (Reuters) - U.S. 10-year Treasuries edged higher in Asia on Tuesday, getting a respite from their recent sell-off after finding some technical support the previous day.

* Ten-year notes rose 3/32 in price to yield 1.800 percent , down roughly 1 basis point from late U.S. trade on Monday.

* The 10-year yield touched an intraday high of 1.859 percent on Monday, its rise stalling just below a three-month high of 1.862 percent hit last Thursday and its 200-day moving average that now comes in at roughly 1.870 percent.

The yield has climbed roughly 33 basis points in August, on track for its biggest one-month rise since December 2010.

* “I don’t get the sense that it (the 10-year yield) will break above current levels, from a technical perspective,” said a trader for a U.S. brokerage in Tokyo. “It seems like there is some short-covering taking place, or some people may be putting on new long positions,” the trader said.

* Safe-haven Treasuries have retreated this month after the European Central Bank indicated it may start buying government bonds again to help bring down crippling borrowing costs in Spain and Italy, with better-than-expected data on U.S. jobs and retail sales having added to the selling pressure.

* Although long liquidation by bond dealers may have run its course, the unwinding of long positions by institutional investors has not been as active recently, suggesting that market positioning may still be tilted toward having bullish bets on Treasuries, said the trader for a U.S. brokerage.

* If economic data points to an improvement in the U.S. economy or the situation in Europe gets a little better, investors who had previously regarded levels around 1.5 percent or 1.6 percent as fair value for 10-year notes may start bracing for a range of 1.6 percent to 2.0 percent, the trader said.

* A trader for a European brokerage house in Tokyo said trading volumes in Treasuries remained very light, with investors waiting to see whether Treasuries will show signs of stabilisation or fall further.

“You’re seeing some people holding off, to see if these levels can hold, and whether they can get a little cheaper,” the trader said. ((masayuki.kitano@thomsonreuters.com +65-6417-4682)(RM:masayuki.kitano.thomsonreuters.com@reuters.net )

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