LONDON: US Treasury prices were broadly steady on Monday in European trading, with investors looking to a bout of important manufacturing and jobs data this week for further insight into the health of the world's largest economy.
Ten-year US government bond yields were steady at 1.94 percent and were seen stuck in a 1.9 to 2.0 percent range over the near-term. Liquidity was thinned by public holidays in Japan and China on Monday, with the euro zone government bond markets also due to shut on Tuesday for a public holiday.
Recent weekly jobless claims data has suggested improvement in the labor market is stalling. Investors will look for further clues on the jobs front from payrolls data on Friday, with the US economy expected to have created 170,00 non-farm jobs in April from 120,000 in March. Before then, inflation and manufacturing data are due.
"I think if there is a risk, it's going to be that they are a bit softer than people are hoping for," Charles Diebel, head of market strategy at Lloyds Bank said, referring to the jobs data.
"Obviously (the market) doesn't offer great value at 1.94 yields in 10-year notes but I don't really see the catalyst for a big back-up from here. So if there is any sell-off, I guess I would be a dip-buyer for the time being," he added.
Data last week showed US economic growth cooled by more than expected in the first quarter of this year, with the economy expanding at a 2.2 percent annual rate, compared to the fourth quarter's 3 percent.
Trouble in the euro zone was also keeping a steady safety bid for US Treasuries, and sentiment would be tested on Thursday with a sale of Spanish debt after the country's sovereign rating suffered a two-notch downgrade last week.
"To get decisively below 1.9 percent (on the 10-year US yield), we need to have a combination of rising peripheral tensions, particularly in Spain, and signs that the US economy is further losing momentum i.e. a weaker than expected non-farm payrolls," Nick Stamenkovic, bond strategist at RIA Capital Markets said.
Two-year US Treasury yields were flat at 0.26 percent and thirty-year government bond yields were little changed at 3.13 percent.