By Richard Leong
NEW YORK, Feb 20 (Reuters) - U.S. Treasury debt prices rose
on Wednesday, even after records of the Federal Reserve's
January meeting showed policymakers discussed the slowing or
stopping of Fed bond purchases that are aimed at reducing
The bond market weakened briefly on the latest minutes from
the Federal Open Market Committee, the U.S. central bank's
policy-setting group, but then rebounded as stock prices fell on
the news, rekindling some safe haven bids for bonds.
'Generally, these are more hawkish than the market had
expected and show a waning commitment to the QE program,' said
David Keeble, global head of interest rate strategy in Credit
Agricole Corporate & Investment Bank in New York.
The U.S. central bank's third round of bond buying, dubbed
QE3, has propped up the prices of Treasuries, mortgage-backed
securities and other fixed income products.
Fears that the Fed might end QE3 before the end of 2013,
initially ignited by the minutes of the Fed's December policy
meeting, have partly kept benchmark yields near 2 percent.
'A number of participants stated that an ongoing evaluation
of the efficacy, costs, and risks of asset purchases might well
lead the committee to taper or end its purchases before it
judged that a substantial improvement in the outlook for the
labor market had occurred,' the minutes of the Jan. 29-30
Federal Open Market Committee meeting showed.
But persistent worries about possible steep federal spending
cuts and an uncertain election outcome in Italy have curbed
large-scale selling in Treasuries, analysts and traders said.
Moreover, some investors believed 10-year Treasury notes
were appealing whenever their yield approached 2.05 percent,
Earlier, Treasuries began the day lower in price but turned
around as stock losses deepened, with traders citing rumors in
the market that a troubled hedge fund was selling assets.
Benchmark 10-year Treasury notes were trading
4/32 higher in price to yield 2.014 percent, down 1.2 basis
points from late Tuesday, while 30-year bonds were
4/32 higher to yield 3.202 percent, down from 3.209 percent late
Wall Street stocks added to earlier losses on weaker
economic growth from less Fed stimulus. The Standard & Poor's
500 index was 1 percent lower.
(Reporting by Richard Leong; Editing by Nick Zieminski)
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Keywords: MARKETS USA BONDS/
(-------MARKET SNAPSHOT AT 3:14 p.m. EST (2014 GMT)------- March T-Bond 143-05/32 (+03/32) March 10-Year note 131-16/32 (+05/32) Change vs Current Nyk yield Three-month bills 0.12 (+0.01) 0.122 Six-month bills 0.13 (+0.00) 0.131 Two-year note 99-31/32 (+01/32) 0.262 Five-year note 100-01/32 (+03/32) 0.867 10-year note 99-27/32 (+03/32) 2.017 30-year bond 98-14/32 (+02/32) 3.207 DOLLAR SWAP SPREADS LAST Change U.S. 2-year dollar swap spread 15.50 (+0.75) U.S. 3-year dollar swap spread 14.50 (+0.25) U.S. 5-year dollar swap spread 15.75 (+0.25) U.S. 10-year dollar swap spread 7.25 (+0.25) U.S. 30-year dollar swap spread -14.00 (+0.50))
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