LONDON: US Treasuries held steady on Tuesday, supported by concerns over the impact of elevated oil prices on global demand and investor caution before the release of consumer confidence data.
"The big event today in terms of Treasuries is going to be this data. If this time there is a visible impact of the behaviour of crude prices, markets may start to assess the outlook a little bit more carefully and with more caution," said Philip Shaw, chief economist at Investec in London.
The yield on the 10-year note was little-changed at 1.93 percent. The benchmark yield has been wedged in a range between 1.79 percent and 2.17 percent since early November 2011.
The European Central Bank's planned mid-week injection of low-cost loans into the banking system could also prove a boost to Treasuries no matter the outcome, traders said.
While a Reuters poll expects the ECB to allocate around 500 billion euros in three-year loans, forecasts vary from 200 billion to 750 billion euros and uncertainty remains over the impact of the double-dose of ultra-cheap funding.
"It could be a risk-off event either way, because on the one hand if the take-up is (large) it's not good that banks want to borrow that much, but on the other hand, people might say it's good because banks want to overfund themselves and put the money in peripheral trade," a London-based trader said.
"But Treasuries can do better in that picture too, particularly because there's no supply or auctions this week," the trader said.
Federal Reserve purchases of 10- and 30-year securities on Tuesday and Wednesday should also be supportive for Treasuries. On Monday, the Fed bought $4.96 billion of Treasuries maturing between May 2018 and February 2020.
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