TREASURIES-Edge up in Asia on bargain hunting

TOKYO, May 28 (BestGrowthStock) – U.S. Treasuries edged up in Asia on
Friday led by bargain hunting after heavy losses the previous day
but trading was limited before a long weekend in the United
States.

* Investors were reluctant to build large positions due to a
shortened trading day in the United States on Friday before the
three-day Memorial Day weekend. Trading ends at 1800 GMT.

* The benchmark 10-year yield (US10YT=RR: ) slipped on Friday
after rising above 3.36 percent the previous day when investors
left safe-haven government bonds for riskier assets such as
stocks after China’s central bank said Europe remains a key
investment market for China’s foreign (Read more about foreign investment into China) exchange reserves.
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* But the Treasury market is expected to retain a firm tone
as players expect it will take time for some debt-stricken
countries in Europe to improve their fiscal situation, analysts
said.

* “Global money is expected to continue flowing into
safer-haven U.S. Treasuries for a while as worries about Europe’s
debt troubles and the impact on the financial system remain,”
said Jun Kato, a senior manager for investment at Shinkin Asset
Management.

* “The market is still susceptible to negative leads and the
10-year yield could fall below 3 percent in the short term.”

* Benchmark 10-year notes rose 6.5/32 in price to yield 3.333
percent (US10YT=RR: ), down about 2 basis points from late U.S.
trade on Thursday. On Tuesday, the benchmark yield fell as far as
around 3.06 percent, the lowest since the end of April last year.

* Ten-year note futures inched up 4/32 to 120-14/32 (TYv1: ).
Two-year yields edged up 1/32 in price to yield 0.8607 percent
(US2YT=RR: ). Thirty-year notes climbed 8.5/32 in price to yield
4.238 percent (US30TY=RR: ), down about 2 basis points.

* The two-year swap spread (USD2YTS=RR: ) (USD2YTS=TWEB: ) — a
gauge of financial system stress — was around 41.5 basis points,
having eased from a one-year peak of 64 basis points brushed on
Tuesday. [MMT/]

* On the data calendar, personal income and consumption
figures for April, the May Chicago purchasing managers’ index and
the University of Michigan survey of consumer sentiment for May
are due out on Friday. (ECONUS: )

Stock Investing

(Reporting by Kaori Kaneko; Editing by Chris Gallagher)

TREASURIES-Edge up in Asia on bargain hunting