Bonds supported by lingering fears on Europe

TOKYO: US Treasuries stayed almost flat in Asia on Tuesday, supported by lingering concerns on the debt and banking crisis in Europe, with the 10-year yield remaining near a 60-year low.

The price of 10-year T-notes eased 1.5/32 for a yield of 1.954 percent, compared to 1.947 percent in late US trade.

It fell to a fresh six-decade low of 1.88 percent on Monday before a report that Italy had asked China to buy Italian debt prompted an easing in safety bids.

Still, growing fears that a Greek default could hurt heavily exposed European banks continued to underpin the market.

Against this backdrop, market players are bullish on a $21 billion 10-year note sale later on Tuesday.

Expectations that the Federal Reserve is likely to increase its purchases of long-dated Treasuries to help the US economy will likely add bids.

Copyright Reuters, 2011