SINGAPORE: US 10-year Treasuries inched higher in Asian trading on Thursday, with market players awaiting a batch of US economic data later in the day for near-term direction clues.
Ten-year Treasuries edged up around 1/32 in price to yield 1.489 percent, down roughly 1 basis point from late US trade on Wednesday.
The 10-year Treasury yield matched a historic low of 1.442 percent earlier this week as worries about slowing US economic growth and the euro zone's sovereign debt crisis bolstered demand for safe haven Treasuries.
"There's no news out. Just a little bit of buying in Asia. Not like it's being driven by anything," said a trader for a US brokerage in Tokyo. While not huge, there has been constant buying of Treasuries during Asian trade recently, he added.
Later on Thursday, Treasuries may take cues from US economic data including existing home sales and jobless claims, the trader said.
Over the medium-term, the 10-year Treasury yield may have more room to fall if it moves towards the 10-year German bond yield, said the trader for a US brokerage. US 10-year yields are now roughly 28 basis points higher than comparable German yields. .
"When I look at Treasuries, they seem particularly cheap compared to Europe. So if we were to have some convergence, that means US rates could go down another 10 or 20 basis points," the trader said.
Not all are convinced that such convergence will occur, however. "The (economic) situation in the United States looks relatively better compared to Germany or the euro zone as a whole," said Tomohisa Fujiki, interest rate strategist for BNP Paribas Securities in Tokyo.
"I get the sense that the impetus may be lacking for US yields to immediately play catch up and fall towards the levels of German yields," Fujiki said.
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