SINGAPORE: US 10-year Treasuries dipped in Asia on Thursday, taking a breather from a rally triggered when minutes of the Federal Reserve's latest meeting stirred renewed talk about the possibility of more monetary stimulus.
Ten-year Treasuries fell around 2/32 in price to yield 1.704 percent, up 1 basis point from late US trade. Treasuries had rallied sharply on Wednesday with the 10-year yield sliding roughly 10 basis points.
The minutes from the Fed's July 31-Aug.1 meeting released on Wednesday suggested the US central bank is likely to deliver another round of monetary stimulus "fairly soon" unless the economy improves considerably.
While that meeting had taken place before the release of some upbeat economic indicators, the minutes refocused attention on the possibility of further Fed monetary easing.
Ten-year Treasuries may rise further in the near term, especially since they seem to have found a floor after a recent sell-off, said a portfolio manager for a major Japanese bank in Tokyo.
"I think there will now be a move in the other direction, and the market will test how much bond yields may fall," he said.
Gains may be limited for now, however, as investors await key data and events coming up next month, the portfolio manager said, adding that 10-year notes will probably trade in a range of about 1.6 percent to 1.8 percent in the near term.
The first half of September is packed with major data and events, including US jobs figures and the European Central Bank's policy meeting in early September, as well as the Fed's policy meeting on Sept. 12-13.
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