LONDON: US Treasuries held steady in Europe on Wednesday, pausing after a sharp sell-off last week though yields were ultimately expected to keep rising on increasing signs of a nascent economic recovery.
Tuesday's economic data contained more evidence the US economy was on a recovery path. Housing starts fell in February, but permits for future construction rose to their highest since October 2008. Existing home sales data is released at 1400 GMT.
Recent data has revealed slightly more strength in the US economy than many economists were expecting. While the Federal Reserve has kept interest rates ultra-low, market expectations of another round of quantitative easing are fading.
Benchmark 10-year Treasury yields were 1.5 basis points higher at 2.38 percent, with T-note futures up 3/32 at 128-41/64.
"I think we're in a new range of 2.10 to 2.40 percent after the sell-off last week," said Nick Stamenkovic, rate strategist at RIA Capital Markets.
The benchmark yield has been moving closer to Oct. 28's high of 2.42 percent. Some strategists say a key turning point was reached last week when it broke above its 200-day moving average, now at 2.232 percent.
"Risk markets seem to have taken a bit of a pause, taking the pressure of Treasuries but the underlying tone of the market remains negative and we think yields are more likely to rise than fall."
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