TREASURIES-Bonds skid on data, Europe; 10-yr yield tests 3 pct

* Sturdy U.S. data, hopes on Europe slash bond appetite

* Market off to soggy start after a poor November

* Investors jump back to stocks, risky assets from bonds

* 10-year note yield tests 3 pct after piercing support
(Updates market action, adds new quotes, changes byline)

By Richard Leong

NEW YORK, Dec 1 (BestGrowthStock) – U.S. Treasuries skidded on
Wednesday with benchmark yields testing the 3 percent mark, as
solid economic data and speculation of more aid to weaker
European nations cut demand for less risky government debt.

Hopes of an improving global economy and additional help
for the debt and fiscal woes in Europe whetted investor
appetite for stocks and risky investments. Major U.S. stock
indexes rose more than 2 percent on the day. For more, see

The market also suffered an erosion in technical support on
the first day of December, signaling another tough month for
bonds. The Treasuries market came off its worst performance
since March, according to Barclays Capital, whose total return
index on Treasuries fell 0.70 percent in November.

“Right now the charts on bonds show they will go lower.
There is a short-term up-trend on yields,” said Art Huprich,
chief market technician at Raymond James in St. Petersburg,
Florida. “The odds favor stocks over bonds.”

Stronger-than-expected data in Asia and Europe triggered
initial losses in bonds in overseas trading. The sell-off
accelerated after a report showed U.S. private sector payrolls
posted their biggest rise in three years in November, lifting
confidence about the job market before Friday’s U.S. employment
report for November. [ID:nN01127417]

Optimism over a resolution to the European debt crisis rose
on news that the United States may be ready to support the
extension of the European Financial Stability Facility via an
extra commitment of money from the International Monetary Fund.
For more, see [ID:nBRU011183]

The yield on 10-year Treasury notes (US10YT=RR: ) was
flirting with levels that would put it on track for its biggest
rise since June 2009. It pierced above key chart support at
2.97 percent and traded as high as 2.99 percent, its highest
since late July.

The 30-year bond yield (US30YT=RR: ) touched 4.24 percent but
short of the then 6-month high of 4.42 percent in mid-November
due to a liquidation of bets linked to the Federal Reserve’s
second bout of quantitative easing, known as QE2.


Wednesday’s sell-off in Treasuries epitomized the recent
gyrations dominated by short-term trades rather than
longer-term strategies, as banks and fund managers prepare to
close their books before year-end, analysts said.

Given this short-term orientation, traders are setting for
the government’s November payroll data on Friday. Its latest
snapshot on the labor market seems more likely to confirm other
indicators that the economy is picking up speed toward year-end
after a summer slowdown.

Economists polled by Reuters predicted U.S. employers
likely added 140,000 jobs in November after hiring 151,000 in
October. But that growth was not expected to bring down the
jobless rate, which was at 9.6 percent in October.

“There have been anecdotal evidence that there is more
hiring this year. This confirms other indicators that the
economy is re-accelerating,” said John Canally, investment
strategist at LPL Financial in Boston.

Canally cautioned that memories of Wednesday’s encouraging
data could fade quickly if there were negative developments on
the debt problem in Europe. This could revive safety bids for
Treasuries and push benchmark yields back down in the 2.90
percent area.
(Additional reporting by Karen Brettell, Editing by Chizu

TREASURIES-Bonds skid on data, Europe; 10-yr yield tests 3 pct