10-yr yield holds near 3 pc, auction eyed

TOKYO: US Treasuries were little changed in Asia on Monday, though yields remain in a downward trend after poor jobs data intensified pessimism over the outlook for the US economy.

Treasury prices moved in a narrow range in thin trade, with many Asian markets, including Hong Kong and Taiwan, closed for holidays.

Treasury yields could fall further reflecting a slew of bearish US economic indicators, but investors were reluctant to chase the 10-year Treasury yield aggressively below the 3-percent level ahead of three-, 10- and 30-year Treasury auctions this week.

"We've seen a series of weak economic indicators with concerns over a double-dip recession growing, but yields have reached reasonably good levels," said Akihiro Nishida, a fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities.

"It appears that it's a bit tough to pursue Treasuries strongly, having seen the 10-year yield fall quite rapidly below the closely watched 3-percent level," Nishida said.

The US Labor Department said on Friday that US employers hired 54,000 workers in May, well below economists' forecast of a 150,000 increase. That marked the weakest monthly job growth since September 2010.

Ten-year Treasuries fell 1/32 in price to yield 2.995 percent, up about 0.4 basis point from late US trade on Friday. The 10-year yield dropped as low as 2.939 percent on last week, its lowest since early December.

Ten-year note futures were nearly flat at 123-11/32 , while the 30-year bond declined 6/32 in price to yield 4.237 percent, up about 1 basis point.

Copyright Reuters, 2011