NEW YORK (Reuters) – In the first auctions the Treasury Department will hold since the Federal Reserve unveiled a new program to sell short-dated paper and buy longer notes and bonds, the question may be: How low can yields go?

The Fed announced on Wednesday it would sell Treasury notes with maturities of three years or less and use the money to buy debt with maturities of between seven and 30 years. The program will be worth $400 billion and is expected to absorb most of the supply of new 30-year bonds from the market over the coming months.

NEW YORK, Sept 23 (Reuters) – Conditions improved in some
parts of the short-term rates markets on Friday after rumors
began circulating that the European Central Bank would take
additional steps to help struggling euro zone countries and
banks.

The prices of eurodollar futures — best on the future
rates paid on dollar deposits in European banks — rose,
indicating expectations for lower rates on dollar deposits,
which would amount to cheaper dollar borrowing costs for
European banks.

NEW YORK (Reuters) – Thursday’s soaring Treasury market was accompanied by news of bipartisan support in the Senate for a bill penalizing the largest U.S. creditor, China, for currency manipulation, but the usual fears of retaliation were gone.

With benchmark 10-year yields well under 2 percent, 30-year bonds yielding less than 3 percent and the assurance of a new Treasury purchasing program by the Federal Reserve, now may be a better time than ever for China to sell its Treasury holdings — from a U.S. perspective, that is.

NEW YORK (Reuters) – The Federal Reserve’s new attempt to stimulate the economy is meant to whip the Treasury yield curve into a flatter shape, but its effects may already have played out in the market, analysts said on Wednesday.

The Fed on Wednesday announced a $400 billion program to lengthen the average maturity of its $2.8 trillion bond portfolio. The central bank will sell shorter-dated Treasuries it already owns and use the money to buy longer-dated ones.

NEW YORK (Reuters) – Tuesday’s two-day Federal Open Market Committee meeting could be a game-changer for the Treasury market, and analysts on Monday offered ways to make the next 48 hours feel safer for U.S. debt traders.

The advice mostly involved “fading” overly dramatic positions in two-year and 10-year notes and 30-year bonds.

NEW YORK, Sept 19 (Reuters) – Treasury bill rates remained
riveted to the floor in U.S. short term markets on Monday while
a key unsecured dollar lending rate edged higher as the euro
zone debt crisis dragged on without new agreements to ease it.

Three-month dollar Libor USD3MFSR= fixed at its highest
in more than a year at 0.3525 percent compared to 0.35133
percent on Friday, with the spread against overnight index
swaps also widening by 2 bps on the day to 27 bps.

NEW YORK, Sept 16 (Reuters) – U.S. debt prices edged higher
on Friday, as traders headed into the weekend with dim hope
that Greece’s debt troubles were contained, while a reading of
U.S. consumer confidence showed spirits were still low.

Price action in the market was volatile, though moves in
either direction were small. Volume was low, about 24 percent
below the 20-day moving average just after 10 a.m., according
to ICAP.

NEW YORK, Sept 16 (Reuters) – U.S. debt prices fell on
Friday as growing confidence that European leaders could find a
solution for the Greek debt crisis, along with waning certainty
about more Federal Reserve economic stimulus, sapped the appeal
of Treasuries.

Traders said they were less worried on Friday that Greece’s
fiscal troubles would eventually bring down the European
financial system.

NEW YORK, Sept 16 (Reuters) – U.S. debt prices with
maturities of between five and 10 years slipped on Friday, but
the price of the 30-year bond rose as traders placed more bets
that the Federal Reserve would take action.

Many U.S. market participants are expecting the Federal
Open Market Committee, which meets next week, to decide to
launch a program to stimulate the economy by buying more
longer-dated U.S. debt while selling short paper such as bills
and one-year notes.

NEW YORK, Sept 15 (Reuters) – U.S. debt prices fell on
Thursday as central banks around the globe unveiled three-month
dollar loans to European financial firms, while U.S. investors
feared the Fed would keep monetary policy loose even as U.S.
inflation rose more than expected.

The European Central Bank announced a program to coordinate
with the Federal Reserve and the Swiss, British and Japanese
central banks to make three-month dollar tenders available to
institutions in need of the currency but unable to access
traditional funding sources. [ID:nF9E7JT00G]