LONDON: US Treasuries held steady in Europe on Wednesday, after slipping the previous day when anxiety about Cyprus ebbed and expectations grew for a solid recovery in US employment.
Treasuries were seen rangebound before a European Central Bank meeting on Thursday when policymakers are expected to keep rates at a record low 0.75 percent but to try to calm investor fears of the euro zone crisis flaring up again after Cyprus's bailout terms rattled investors.
The US 10-year T-note yield was last at 1.86 percent, unchanged from late New York trade. It rose about 3 basis points on Tuesday after hitting a two-month low of 1.823 percent.
"The market seems to be trading sideways more than anything. You've got headline risk globally as you have the ECB meeting and the risk is that they could be dovish and then you have the non-farm payrolls on Friday," a trader said.
Investors will get a first look at labour demand for March with the release later on Wednesday of data on private sector hiring payrolls by processor ADP before the non-farm payrolls report on Friday.
Although weak US manufacturing figures on Monday helped to drive 10-year yields to a two-month low, investors are expecting the non-farm payrolls data, the most important event of the week, to show a net gain of 200,000 in March, well above its trend since the US economy recovered from the 2008 financial crisis.
Nevertheless, Treasuries were underpinned by expectations the Federal Reserve will keep buying bonds for the time being to knock down unemployment further.
"US bond yields also look attractive, comparatively speaking, as yields on Japanese and German bonds are falling sharply," said a trader at a Japanese bank.
The 10-year Japanese government bond yield is flirting with 10-year lows near 0.5 percent on hopes of aggressive monetary easing by the Bank of Japan. German Bunds yield about 1.31 percent, not far from their eight-month low near 1.25 percent hit last week on worries about Cyprus.
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