Bonds slip after 3-day rally, Fed awaited
Stock market gains also weighed on Treasuries as investors sought value in riskier assets. Major stock indices rose more than 1 percent.
Markets are mainly waiting for the Federal Reserve's statement around 12:30 p.m. (1630 GMT) at the conclusion of a two-day policy meeting. Fed Chairman Ben Bernanke will hold a press briefing at 2:15 p.m.
Analysts said the Fed could begin to prepare financial markets for further monetary easing at the end of the meeting, even if it doesn't begin a new easing plan right away.
After a three-day rally, benchmark 10-year Treasury notes slipped 19/32 on Wednesday, their yields rising to 2.06 percent from 1.99 percent late Tuesday.
Thirty-year Treasuries were down 2-8/32, their yields rising to 3.10 percent from 3 percent late Tuesday.
The Treasury announced a $72 billion quarterly refunding of its 3-year, 10-year and 30-year debt securities, which will raise $48.1 billion in new cash.
The US Treasury said it would hold bond and note auction sizes stable amid uncertainty over fiscal stimulus legislation and deficit reduction moves by a congressional panel.
An EU rescue package for Greece demanding severe austerity for that nation also remained in focus. A safety bid boosted Treasuries on Tuesday after Greece said it would vote on the plan, designed to prevent a sovereign default.
"Greece did invent democracy and in light of the Arab Spring, Occupy Wall Street, etcetera, tossing the onus to the people (demos) seems reasonably fair," David Ader, head of government bond strategy at CRT Capital Group in Stamford Connecticut, wrote in a research note.
"Given the state of the Greek economy... we bet the vote in favor of the euro will lose some fans," he said. "Pundits say the Greeks don't want to leave the euro, but we doubt Demitrius-six-pack would see it that way."
Germany said on Wednesday it was still an open question whether the next tranche of international aid for Greece could be paid out before the planned referendum, but Greece did not appear to need the money until mid-December.
ON TAP FROM THE FED
Fed watchers believe the US central bank could hint it was moving to a broader framework for making monetary policy, a construction including more specific goals for employment, inflation or even economic growth.
Some economists say the Fed should target nominal gross domestic product (GDP) to address high unemployment.
The Fed is scheduled to release its quarterly forecasts for economic growth, inflation and joblessness at 2 p.m. (1800 GMT) and could use those to provide more specific policy guidance.
The recent improvement in US economic data could let the Fed make a more gradual move toward more monetary easing than might have been the case if US growth had ground to a halt.
Still, after Fed Governor Daniel Tarullo recently advocated fresh financial help for the mortgage sector, many analysts bet the Fed will make another large push into the mortgage market.
The Fed has already offered unprecedented stimulus to the US economy after a recession wiped out over 8 million jobs.
It slashed official interest rates to effectively zero and engaged in two rounds of large-scale bond purchases.
Helping riskier assets and hurting bonds, the ADP National Employment Report showed US private employers added 110,000 jobs in October, more than forecast, and that more were added in September than first reported.
The ADP figures come ahead of the government's much more comprehensive labor market report on Friday. That report is expected to show a rise in overall nonfarm payrolls of 95,000 last month and a rise in private payrolls of 120,000.
Copyright Reuters, 2011