LONDON: US debt prices were broadly steady as investors looked to Federal Reserve chief Ben Bernanke's speech this week for hints of a third round of quantitative easing and sought fresh details on the European Central Bank's bond-buying plans.
US 10-year government bond yields were 0.009 basis points lower at 1.64 percent, while the five-year equivalent shed 0.006 bps to 0.68 percent.
Bernanke's widely anticipated speech in Jackson Hole, Wyoming comes as expectations for a so-called QE3 have increased since minutes from the central bank's August meeting, even though there has been an improvement in US data since that meeting.
"The sentiment is still being supported by hopes that we are going to get a repeat of Jackson Hole two years ago, when Bernanke effectively signaled QE2," Philip Shaw, chief economist at Investec, said.
"My guess is, rather than the economic data, it will be whether that sentiment holds up which will be the primary driver for the Treasury market this week."
The possibility of more bond-buying could support $99 billion in new debt on offer this week - including two-year bonds later in the day, five-year debt on Wednesday and seven-year paper on Thursday.
The ECB has said it is considering resuming bond-purchases but the details remain fleeting and are unlikely to be ironed out until at least September. Expectations for central bank action is high in both sides of the Atlantic and any disappointment would likely favour safe-haven debt, market participants said.
"We are still reasonably constructive here," one trader said. "I don't think the Fed are going to announce more QE at Jackson Hole. Perversely that (will prompt) more of a sell-off in equities - that should be bond-supportive."
The trader expected any sell-off in 10-year US debt to be capped at 1.70 percent in yield and expected it to trade below 1.50 percent over the next two weeks.
"I don't expect yields to go lower right here but I am constructive on the market over the next two weeks, so looking for an occasion to buy and stay long in September because there is too much good news priced in Europe," the trader added.
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