LONDON: US Treasuries prices held steady in Europe on Thursday on cautious expectations that Greece will eventually reach a deal to secure a new bailout and as traders braced for the last round of this week's T-note sales.
Although Greek politicians did not agree the full range of painful reforms needed to secure a second bailout as expected on Wednesday, there was still hope a deal could be reached before a meeting of euro zone finance ministers at 1700 GMT.
"Everyone's waiting on Greece. A lot of the good news, and I say that very loosely on Greece, is in the price," a trader said in London.
Treasuries are likely to dip slightly if a Greek deal is announced, analysts and traders said. US debt could also take a hit if the European Central Bank, at a press conference later on Thursday, signals it will participate in a Greek debt restructuring.
"The other scenario, in terms of the failure to agree and calamity in Greece, would prompt significant adjustments and move that 10-year Treasury yield back down to 1.90, 1.80 levels," said Chris Scicluna, deputy head of economic research at Daiwa Capital Markets.
Yields on 10-year T-notes and 30-year debt were broadly flat at 2 percent and 3.1 percent respectively.
T-note futures were little changed at 131-5/64.
The market will also take direction from US four-week average jobless figures due later in the session. Positive non-farm payrolls data last week indicated recovery in the US economy, pushing Treasury yields higher.
"If we get further good claims numbers today, that would also support that upward shift in yields," said Daiwa's Scicluna.
The Treasury will sell $16 billion of 30-year bonds on Thursday, after Wednesday's auction of 10-year debt met good demand.
"Treasuries can do better after the 30-year auction tonight. I'm not talking about 10 years back to 1.80 percent, but ... we could get back around 1.95 percent," the trader said.
Comments
Comments are closed.