Longer-dated Treasuries ease

Longer-dated US Treasuries eased marginally on Tuesday as efforts by investors to push for concessions in new debt auctions this week were offset by sagging global stocks and a clash by Greek bondholders and euro zone officials over the terms of a debt swap.
The Treasury auctioned $35 billion of two-year notes, the first of three auctions this week in which the Treasury will offer $99 billion in new debt. Traders often push to reduce debt prices heading into Treasury auctions. Investors were also cautious as the Federal Reserve began a two-day policy meeting, with the Fed due to issue its policy statement at the meeting's close on Wednesday.
Tuesday's US two-year note auction was met with about average demand, with the high yield of 0.25 percent near expectations. "Treasuries were trading lower leading into the auction, with the two-year sector building in a modest outright concession, although it was the outperformer on the curve. Since the results, Treasuries have done very little," said Ian Lyngen, senior government bond strategist at CRT Capital Group in Stamford, Connecticut.
Benchmark 10-year Treasury notes traded 1/32 lower in price with their yield little changed from late Monday at 2.06 percent, while 30-year bonds traded 10/32 lower to yield 3.15 percent, up from 3.14 percent. Strategists said the market was basically "on hold" until the results of the Fed's policy meeting are released on Wednesday afternoon.
"I guess people have realised there's no sense in getting ahead of themselves before the Fed," said Gennadiy Goldberg, interest rate strategist at 4Cast, Inc, referring to Monday's selling. The US central bank's policy statement and news conference by Fed Chairman Ben Bernanke that will follow the close of the Fed meeting on Wednesday will mark the start of a new practice of announcing policymakers' interest rate projections. Many market participants also see a chance that the Fed will announce a specific inflation target. But no one can guess exactly how the Fed will communicate these new pieces of information. "A lot of people are just waiting to see what exactly the Fed says and what comes out, just because there are so many possibilities," Goldberg said.