TOKYO: US Treasuries prices remained under supply pressure on Monday, bolstering yields despite continued uncertainty in Europe, ahead of heavy new issuance scheduled in the remainder of the year.
The Treasury is expected to sell $177 billion in seven auctions spread over eight trading days. This will begin on Monday with $32 billion in three-year notes, followed by $21 billion in 10-year notes on Tuesday and $13 billion in 30-year bonds on Wednesday.
"Most banks are closing their books, so there's going to have to be some concession to distribute the securities," said a dealer at a European bank in Tokyo.
Benchmark 10-year note yields were at 2.06 percent, after rising as high as 2.07 percent earlier. Thirty-year bond yields were at 3.10 percent after rising as high as 3.14 percent.
But fear of contagion from the euro zone's debt woes continued after the two-day European Union summit left investors uncertain about the details and timing of any steps to stem the crisis. The continuing uncertainty will keep safe-haven Treasuries from selling off much even as the market absorbs the supply, market participants said.
Moody's Investors Service kept those fears alive when it said on Monday it still expects to review its ratings on all European Union sovereign credit in the first quarter of next year, adding that last week's agreement by European policymakers offered few new measures to resolve the region's debt crisis.
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