NEW YORK (Reuters) – U.S. Treasury debt prices rose on Monday as investors did some bargain-hunting following a sharp sell-off last week that was tied to inflation fears and reduced safety bids on optimism about the European debt crisis.

Longer-dated yields retreated from their highest levels since May, which were set on Friday when investors sold Treasuries on fears a Federal Reserve plan to do a third round of bond purchases would fuel rising inflation.

NEW YORK (Reuters) – U.S. Treasury debt prices rose on Monday as investors did some bargain-hunting following a sharp sell-off last week that was tied to inflation fears and reduced safety bids on optimism about the European debt crisis.

Longer-dated yields retreated from their highest levels since May, which were set on Friday when investors sold Treasuries on fears a Federal Reserve plan to do a third round of bond purchases would fuel rising inflation.

NEW YORK/LONDON (Reuters) – Key overnight lending rates dipped on Monday as investors digested $66 billion of U.S. government debt supply from last week and with pressure from the Federal Reserve’s latest QE3 stimulus plan to buy mortgage-backed securities.

Investors moved into the overnight repurchase agreement market as the $32 billion of three-year notes, $21 billion of reopened 10-year notes and $13 billion of reopened 30-year bonds that were sold last week settled on Monday.

NEW YORK (Reuters) – The Federal Reserve will buy a total of $600 billion (369 billion pounds) of bonds under its new stimulus program announced Thursday, known as QE3, and will look for a U.S. unemployment rate of 7 percent before it halts the program, according to the median of forecasts from a Reuters poll on Friday.

Forecasts from 52 economists for the ultimate size of the program ranged from $250 billion to $2 trillion, the poll found.

NEW YORK (Reuters) – The Federal Reserve will buy a total of $600 billion of bonds under its new stimulus program announced Thursday, known as QE3, and will look for a U.S. unemployment rate of 7 percent before it halts the program, according to the median of forecasts from a Reuters poll on Friday.

Forecasts from 52 economists for the ultimate size of the program ranged from $250 billion to $2 trillion, the poll found.

NEW YORK (Reuters) – U.S. prime money market funds boosted their holdings of euro zone bank debt in August with some reduced worries about contagion from the debt crisis in the euro zone, a report from J.P. Morgan Securities released on Wednesday showed.

Prime money market funds added $16 billion to their euro zone debt holdings in August after a $14 billion increase in July.

NEW YORK/LONDON (Reuters) – Any cancellation of the Federal Reserve’s “Operation Twist” economic stimulus plan as part of a new bond purchase program would likely mean lower interest rates on repurchase agreements, an RBC Capital Markets strategist said on Tuesday.

If the Fed were to stop selling shorter-dated Treasuries due to the end of Twist, dealers would not have as much need to finance Treasury positions in the overnight repo market, which in turn would mean lower repo rates, said Michael Cloherty, head of U.S. rates strategy at RBC Capital Markets in New York.

NEW YORK (Reuters) – Interest rates on U.S. repurchase agreements could dip if the Federal Reserve this week undertakes another round of quantitative easing as expected, a strategist at J.P. Morgan Securities said on Monday.

In the previous two rounds of bond purchases, known as QE1 and QE2 and under which the Fed bought $2.3 trillion in mortgage and government debt, repo rates fell, said Alex Roever, short-term interest rates strategist at J.P. Morgan Securities in New York.

NEW YORK/LONDON, July 20 (Reuters) – The interest rate on
U.S. repurchase agreements rose on Friday, recovering a portion
of the week’s losses that have come amid speculation the Federal
Reserve could eventually cut the interest rate it pays on excess
reserves to banks.

Investors are mulling whether the Fed could follow the lead
of the European Central Bank, which this month cut to zero the
deposit rate it pays banks for parking money with it overnight.

NEW YORK, July 19 (Reuters) – The U.S. commercial paper
market expanded in the latest week, suggesting an increase in
corporate borrowing despite worries about a global economic
slowdown, Federal Reserve data showed on Thursday.

The size of the U.S. commercial paper market grew by $600
million to $982.5 billion in the week ended July 18 on a
seasonally adjusted basis, according to the latest Fed data. The
market had expanded by $9.4 billion the previous week.