TOKYO: US Treasuries eased slightly inAsiaon Monday as resistance at the 200-day moving average triggered profit-taking and blocked their week-old rally for now, although concerns aboutEurope's debt problems and global growth are supporting the market.
The 10-year notes yield rose about two basis points to 2.25 percent. Although the yield briefly fell below its 200-day average at 2.22 percent on Friday, it has failed to stay below that level, sparking profit-taking.
The 10-year Treasuries futures likewise slipped below their 200-day average near 129 - 2/32, trading at 128 - 23/32, down 5.5/32 on the day.
Still, the market's gain last week led many to think that the market's selloff-- triggered earlier this month by strong payroll data and the Fed's upgrade of its economic assessment -- may have run its course.
"Even if theUSeconomy gains traction in the near future, uncertainty remains on its outlook for the next year, when payroll tax cuts will expire," said Yoshinori Shigemi, non-yen fixed income strategist at RBS.
A clear break of 200-day average could cement the view that the 10-year yield hit a near-term peak already when it rose to a 4-1/2-month high near 2.40 percent earlier this month.
A number of analysts and investors, including Shigemi at RBS, said the 10-year yield would trade in a range of 2.10 to 2.40 percent for the time being, about 25 basis points higher than previous trading range.
Market players say the market will be supported by concerns over the global economy. AlthoughGreececlinched its debt restructure earlier this month and averted a messy default, investors are not sure if other countries such asPortugalcan stand on their own feet without more international aid.
Unexpectedly weak business readings inEuropeandChinalast week also added to worries about the global economy, underscoring the positive outlook for bonds.
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