TOKYO: US Treasuries slipped in Asia on Wednesday following news that President Barack Obama will unveil a $300 billion package to create new jobs later in the week.
CNN reported on Wednesday, citing Democratic sources, that Obama plans to lay out the job-creation package on Thursday.
The proposed new spending would be offset by budget cuts, the report said, signaling that the Democratic president hopes to mollify the concerns of Republican fiscal hawks resistant to his jobs ideas.
Ten-year notes rose fell 13.5/32 in price to yield 2.03 percent, compared to 1.98 percent in late US trade on Tuesday.
But market players also said it was not yet clear whether Obama's new job proposals would boost investor risk appetite and ease worries about the global slowdown and the euro zone debt mess.
"The market is reacting to the news on Obama's proposal for now. But I don't know if the Republicans will agree. It's too early to say we can expect healthy recovery in jobs," said a trader at a Japanese bank.
Expectations that the Federal Reserve would soon start buying 30-year bonds while selling shorter-term notes -- so-called Operation Twist -- are likely to support the market, particularly at the long-end of the curve.
Mounting worries over the European debt crisis and its possible impact on the banking sector continued to underpin the market.
Copyright Reuters, 2011
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