NEW YORK, May 3 (Reuters) – The U.S. Treasury’s 52-week bill sale produced the lowest yield on record for a one-year bill auction, evidence of the demand for short-dated bills.

The Treasury’s $28 billion four-week bill auction also drew strong demand, with the 4.81 ratio of bids received over those accepted a significant improvement from last month.

“In spite of yields approaching zero, the market bid aggressively in (the four-week) auction,” said Thomas Simons, money market economist at Jefferies & Co. in New York.

Simons said short-dated bills are in short supply. Since many investors cannot buy bills at negative yield levels, secondary trading has been light. As a result, these investors must “bid aggressively in auctions to take any positive yield they can find, scant as it may be,” he said.

RECORD LOW YIELD IN ONE-YEAR BILL AUCTION

The Treasury said the 0.2 percent yield on the 364-day bill it sold on Tuesday was the lowest ever for a one-year bill. [nWAT015084]

“The long end of the bill curve has been slower to react to the new FDIC rules enacted in the beginning of April, but yields have declined steadily in recent weeks,” Simons said.

NEW YORK, May 2 (Reuters) – U.S. sales of three- and six-month bills on Monday drew strong demand, evidence that investors expect short-term U.S. interest rates to remain exceptionally low for at least the next half year.

Short-term rates have been anchored by the Federal Reserve’s near zero interest-rate policy, a stance the U.S. central bank pledged again last week to keep in place for an extended period.

“Fed policy is still the dominant factor in the credit market,” said Gary Thayer, chief macro strategist at Wells Fargo Advisors in St. Louis, Missouri.

“The Fed last week said it would keep short-term rates exceptionally low for an extended period, and at the press conference after the Fed’s policy meeting (Fed Chairman Ben), Bernanke said that could be for at least two or three meetings, so that means several months,” Thayer said.

In a Dutch auction, the U.S. Treasury sold $29 billion in three-month bills at a high rate of 0.05 percent.

The ratio of bids received over those accepted was 4.75, higher than the year-to-date average for three-month bill sales of 4.47, said money market economists at Jefferies & Co.

Similarly, the Treasury also sold $27 billion in six-month bills at a high rate of 0.100 percent, with a bid-to-cover ratio of 4.94, higher than the year-to-date average of 4.60.

NEW YORK, April 29 (Reuters) – U.S. Treasuries prices were flat in light volume on Friday, consolidating recent gains this week on weaker economic data and prospects for accommodative monetary policy in the months ahead.

Technical barriers also restrained Treasuries. Benchmark 10-year notes yields US10YT=RR eased to 3.30 percent early in the session, nearing major resistance at 3.25 percent, and then backed up a bit to 3.31 percent. The 10-year note yield stood at 3.48 percent at the end of March.

“Some early signs suggest the technical impetus is getting a bit long in the tooth,” said David Ader, senior government bond strategist at CRT Capital in Stamford, Connecticut.

Conversely, he said, it would not take much buying to drive a technical breakout, “literally just a few basis points better.”

Next week’s scheduled Treasuries purchases by the Federal Reserve should be supportive for bonds as the market awaits the widely followed monthly employment data due next Friday.

As scheduled on Friday, the Fed bought $6.7 billion in Treasuries with maturities ranging from November 2013 to March 2015.

With 10-year yields near major resistance at 3.25 percent, RBS strategists recommended “reducing long exposure.”

NEW YORK (Reuters) – U.S. Treasuries prices slipped on Friday in light volume, consolidating recent gains scored this week on weaker economic data and prospects for accommodative monetary policy in the months ahead.

Technical barriers were also shackling Treasuries. Benchmark 10-year notes yields eased to 3.30 percent early in the session, nearing major resistance at 3.25 percent, and then backed up a bit to 3.32 percent.

“Some early signs suggest the technical impetus is getting a bit long in the tooth,” said David Ader, senior government bond strategist at CRT Capital in Stamford, Connecticut.

Conversely, it would not take much to drive a technical breakout, he said, “literally just a few basis points better.”

Next week’s scheduled Treasuries purchases by the Federal Reserve should be supportive for bonds as the market waits for the influential monthly employment data due next Friday.

In the current trading session, the Fed is scheduled to buy $6.7 billion in Treasuries with maturities ranging from October 2013 to March 2015.

With 10-year yields near major resistance at 3.25 percent, RBS strategists recommended “reducing long exposure.”

NEW YORK, April 28 (Reuters) – U.S. Treasuries prices rose on Thursday after the government said the nation’s economy grew 1.8 percent in the first quarter, less than forecast, as weak government and consumer spending restrained growth.

The nation’s growth rate dropped from the previous quarter, when the economy grew at a 3.1 percent pace. Separately, new claims for jobless benefits jumped to 429,000 last week, higher than the 392,000 Reuters consensus forecast.

“The timeliest of timely indicators, initial unemployment claims, are going the wrong way,” said Chris Rupkey, chief financial economist at Bank of Tokyo/Mitsubishi UFJ in New York.

“At the moment we regard the rise as technical, but we need to see initial unemployment claims fall sharply below 400,000 in upcoming weeks to make sure the economy is not slowing due to latest headwind of higher gasoline prices.” ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

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Benchmark 10-year notes US10YT=RR, up 7/32 before the reports were released, were up by 12/32 afterwards, their yields easing to 3.32 percent from 3.36 percent on Wednesday.

“The market is improving and testing nearest technical resistance with 5s-10s leading the charge,” said David Ader, senior government bond strategist at CRT Capital.

NEW YORK, April 27 (Reuters) – U.S. government securities prices on Wednesday gave back some of the gains scored this week as traders prepared for a five-year note auction and a Federal Reserve statement and news conference this afternoon.

A government report showing orders for durable goods rose in March, topping forecasts, and held bonds at the lower levels they were at in early dealings. [ID:nCAT005416]

The market’s “subdued” reaction to the stronger than forecast durable goods orders showed the market was more concerned with “the Fed and the auctions”, said David Ader, senior government bond strategist at CRT Capital Group.

Before the Treasury’s $35 billion five-year auction, “the belly of the curve (was) the underperformer,” he noted.

Following the five-year debt sale, the market will focus on a Fed policy statement due at 12:30 p.m. EDT (1730 GMT) and Fed Chairman Ben Bernanke’s news conference at 2:15 p.m. (1915 GMT) where the Fed chief is expected to espouse the cause of monetary accommodation as long as the economy requires it.

“The Fed is trying to walk a very fine line right now,” said Julia Coronado, chief economist-North America, BNP Paribas, New York. “The (first-quarter’s) economic readings show how fragile the recovery still is … so you will probably see the Fed speak about an improving economy and acknowledge rising energy prices without sounding too hawkish. The economy still needs the support of the Fed.”

That proposition has left the market expecting that even as the Fed approaches the end of its second phase of bond buying (QE2), it will hold on to its portfolio — and thus its current level of monetary accommodation — for some time.

NEW YORK, April 26 (Reuters) – U.S. government securities prices rose on Tuesday in advance of Federal Reserve Chairman Ben Bernanke’s news conference on Wednesday at which he is expected to express support for the extension of easy monetary policy to help the economy.

Solid demand for $35 billion of new two-year debt also buttressed the bond market, with yields hovering at their lowest level in about a month. For more on the two-year auction, see [ID:nTAR000255]

Offering the market overall support was the view that even as the Fed approaches the end of its second phase of bond buying (QE2), it will hold on to its portfolio — and thus its current level of monetary accommodation — for some time.

“(The Fed will) focus on flexibility,” said Constance Hunter, chief economist at Aladdin Capital Holdings in Stamford, Connecticut. “There will probably not be a QE3, but they will probably not withdraw QE2 either. They are going to leave their balance sheet at this level for some time.”

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Fed balance sheet: link.reuters.com/buf92k

Fed QE timelines: r.reuters.com/faq98r

NEW YORK, April 26 (Reuters) – U.S. government securities prices rose on Tuesday but were largely in a holding pattern before a debt auction later in the session and ahead of Federal Reserve Chairman Ben Bernanke’s news conference on Wednesday.

The Fed will end a two-day policy meeting with a statement at 12:30 p.m. (1630 GMT) on Wednesday and a news conference by Fed Chairman Ben Bernanke at 2:15 p.m. (1615 GMT).

The Treasury will auction $35 billion in two-year notes at 1 p.m. (1700 GMT), $35 billion in five-year notes on Wednesday, and $29 billion in seven-year notes on Thursday.

Maturing debt totaling $52.6 billion, Fed buybacks, and month-end demand should lighten the burden of distributing that new supply, some analysts said.

“While we await further news (coming soon!), overall technical conditions appear modestly favorable for Treasuries near term, but the 3.25 percent level should be daunting resistance for 10-year yields and the market generally,” according to a research note from John Briggs, interest rate strategist at RBS Securities in Stamford, Connecticut.

Benchmark 10-year notes US10YT=RR rose 4/32, their yields easing to 3.35 percent from 3.37 percent on Monday.

Offering the market overall support was the view that even as the Fed approaches the end of its second phase of bond buying, it will hold on to its portfolio — and thus its current level of monetary accommodation — for some time.

NEW YORK, April 25 (Reuters) – U.S. government debt prices rose on Monday, helped by the view that even as Federal Reserve approaches the end of its second phase of bond buying, it will hold on to its portfolio — and thus its current level of monetary accommodation — for some time.

The Fed is still in the second phase of quantitative easing, known as QE2, a $600 billion bond purchase program intended to help spur economic growth.

Bonds reached session highs after the Fed bought $7.24 billion in Treasuries maturing October 2016 to March 2018.

Stock market losses also made bonds look more appealing.

Markets expect the Fed to complete its QE2 purchases by mid-year, and many analysts say the Fed will hold the size of its balance sheet steady by reinvesting maturing assets after June to avoid a passive tightening — an issue likely to be discussed at its April 26-27 meeting. [ID:nN1941922]

Fed policy makers who favor accommodation “seem to be in the lead, which leads us to expect no substantial shift in the (policy) statement,” from the central bank’s two-day meeting this week, said David Ader, senior government bond strategist at CRT Capital Group in Stamford, Connecticut.

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NEW YORK (Reuters) – U.S. government debt prices rose on Monday, helped by the view that even as Federal Reserve approaches the end of its second phase of bond buying, it will hold on to its portfolio — and thus its current level of monetary accommodation — for some time.

The Fed is still in the second phase of quantitative easing, known as QE2, a $600 billion bond purchase program intended to help spur economic growth.

Markets expect the central bank to complete the purchases by mid-year, and many analysts say the Fed will hold the size of its balance sheet steady by reinvesting maturing assets after June to avoid a passive tightening — an issue likely to be discussed at the April 26-27 meeting.

Fed policy makers who favor accommodation “seem to be in the lead, which leads us to expect no substantial shift in the (policy) statement,” from the central bank’s two-day meeting this week, said David Ader, senior government bond strategist at CRT Capital Group in Stamford, Connecticut.

The Fed policy meeting ends on Wednesday with a news conference with Fed Chairman Ben Bernanke.

A more tempered view of economic growth — underscored by a rise in the price of Brent crude oil to $124 a barrel – also supported bond prices.

Benchmark 10-year notes rose 5/32 in price, their yields easing to 3.39 percent from 3.41 percent on Thursday. The market was closed on Friday for a holiday.