SINGAPORE: US 10-year Treasuries inched lower on Thursday, with investors looking to jobs data on Friday for hints on whether the Federal Reserve will soon temper the pace of its aggressive monetary stimulus.
Ten-year notes eased 2/32 in price with their yields edging up about 1 basis point to 2.098 percent. Over the past week or so, the 10-year yield has stayed between a 13-month high of 2.235 percent set on May 29 and the May 31 intraday low of 2.066 percent.
Treasuries had advanced on Wednesday as weak economic data, including a disappointing reading on private sector employment, helped spur safe haven buying of bonds.
A report by payrolls processor ADP showed hiring by US firms was sluggish in May, raising the risk that Friday's jobs data could disappoint.
Economists recently polled by Reuters on the jobs data forecast US employers likely added 170,000 jobs in May, while the jobless rate was seen unchanged at 7.5 percent.
An increase in non-farm payrolls along those lines might be enough to dent Treasuries, said Hiroki Shimazu, senior market economist for SMBC Nikko Securities in Tokyo.
"Since expectations are being scaled back after the ADP report, I think a number of about 170,000 would have a negative impact on bonds," he said.
Shimazu said he thought such an outcome could keep alive the chances of the Fed reducing its $85 billion in monthly asset buying starting around September. But if the jobs increase comes in near 100,000, that may push back the possible timing of such tapering, he said.
Fed Chairman Ben Bernanke and other top Fed officials suggested recently they could start paring bond buys as soon as the Fed's next few meetings if the economy improves further.
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