NEW YORK: US Treasury prices edged higher on Tuesday as fewer than normal market participants returned to their desks for the shortened week between the Christmas and New Year holidays.
Treasury analysts reported almost no market activity on Tuesday, with New York's open ending a period during which financial centres in New York and London were shuttered for Christmas and Boxing Day.
Kevin Walter, global head of Treasury trading at BNP Paribas in New York, said the slight price gains could be attributed simply to the presence of trades in the Treasury market.
"If you take a look at volume it can kind of really explain it," he said. "During the entire overnight session and all of the New York session we've barely done a billion in 10s. We did see one buyer out of Europe but that wasn't very big.
"A hundred million tens can move the market that far in volume alone. It doesn't take much to move things around."
The move pushed the 10-year yield down 2 basis points, while the 30-year yield fall a basis point. A quiet week lies ahead, with Tuesday's releases on consumer confidence and housing prices amounting only to second- and third-tier economic data not likely to affect prices.
"The big event of the week will be tomorrow's sale (of Treasury notes by the Federal Reserve) in the front end (of the yield curve)," said Raymond Remy, a trader at Daiwa Securities in New York. "There's no coupon auction and there's no buybacks."
The European financial crisis also seemed to be at least temporarily quelled, with no new developments to drive investors into Treasuries. "Things seem quiet in Europe," Remy said. "Things seem somewhat quiet in Asia."
Benchmark 10-year Treasury notes were last trading 5/32 higher in price and yielding 2.01 percent, down from 2.03 percent on Friday. Long 30-year Treasury bonds were displaying a price gain of 10/32 and yielding 3.05 percent, down from 3.06 percent at Friday's close.
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