TREASURIES-Bonds sag on news of Libya peace plan

TOKYO, April 11 (Reuters) – U.S. Treasury prices fell in Asia on Monday as market players
unwound safe-haven bids after news that Muammar Gaddafi has accepted a roadmap for ending the
civil war in Libya including an immediate ceasefire.

* The yield on the 10-year U.S. Treasuries rose to 3.60 percent from 3.58
percent late on Friday. Earlier on Friday it had hit a seven-week high of 3.62 percent.

* The African Union said on Monday that Gaddafi had accepted a peace plan but an opposition
representative said it would only work if Gaddafi left power. [ID:nLDE7390JP] The news, which
pushed down oil prices slightly, came as investors braced for $66 billion in new three-, 10- and
30-year Treasury notes this week.

* “Investors are concerned about inflation. I expect the 10-year yield could rise to around
3.80 percent,” said a fund manager at a U.S. asset management firm, adding that U.S. inflation
data later in the week could become a trigger for further rise in bond yields.

* Investors were relieved after U.S. President Barack Obama and congressional leaders struck
a last-minute budget deal late on Friday, narrowly averting a government shutdown.

* Still, market players expect more political bickering ahead of next month, when the
government could hit the current $14.3 trillion limit on its borrowing authority and will need
Congress to approve another increase in that debt ceiling.

(Reporting by Hideyuki Sano; Editing by Chris Gallagher)

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TREASURIES-Bonds sag on news of Libya peace plan