SINGAPORE: US 10-year Treasuries rose on Wednesday and the yield slipped from a three-month high, as traders unwound bearish bets after the securities again found support at a key chart level the previous day.
Ten-year Treasuries rose 8/32 in price to yield 1.774 percent, down roughly 3 basis points from late US trade on Tuesday.
The 10-year yield had hit a three-month high near 1.863 percent on Tuesday as safe haven Treasuries came under pressure due to renewed speculation that the European Central Bank will eventually take action to stem rises in Spanish and Italian borrowing costs and ease the euro zone's debt crisis.
Tuesday's rise in the 10-year yield, however, stalled just below its 200-day moving average near 1.870 percent. The 10-year yield had also risen close to that level on Monday and last Thursday, but the support has held each time.
"I think there is a sense of relief over the fact that the 10-year yield has repeatedly bounced off that 200-day moving average," said Tomohisa Fujiki, interest rate strategist for BNP Paribas Securities in Tokyo.
One key factor in the near term is whether the ECB can unveil measures at its policy meeting in early September, that meet the market's rising expectations, Fujiki said.
Later on Wednesday, Treasuries could take cues from the minutes of the Federal Reserve's July 31-Aug. 1 policy meeting. Treasuries may get a boost if the minutes re-ignite speculation about the possibility of imminent monetary stimulus.
Such speculation has waned this month after data on US jobs and retail sales came in better than expected, helping spark a rise in Treasury yields. The 10-year yield has climbed about 30 basis points so far in August, putting it on track for its biggest monthly rise since December 2010.
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