TREASURIES-Fall in Asia as traders trim longs before data

TOKYO, June 2 (BestGrowthStock) – U.S. Treasuries fell in Asia on
Wednesday as traders trimmed long positions ahead of high-profile
monthly employment data due later in the week.

* Some also took profits a day after a slide on Wall Street
and growing fears the euro zone sovereign debt crisis is
spreading to the European banking system sparked a rally in
safe-haven U.S. Treasuries.

* Upbeat U.S. data is one factor making players hesitant to
chase Treasury prices higher, traders said. The Institute for
Supply Management data showed on Tuesday that the U.S.
manufacturing sector expanded in May for a 10th straight month,
while a government report showed construction spending rose at
its fastest pace in nearly 10 years in April. [ID:nN01112488]

* Recent solid data suggests the economy will add jobs,
making bond bulls a bit cautious ahead of the government’s
monthly jobs data due on Friday. A Reuters survey predicted
nonfarm payrolls increased by 513,000 — the biggest monthly gain
since 1983 — in May after a 290,000 rise in April. [ECI/US]

* U.S. Vice President Joe Biden on Tuesday predicted Friday’s
jobs data would show a much larger number of jobs created than in
April. [ID:nWEN5343]

* “It’s hard to keep piling up long positions as economic
data has been strong,” said a bond trader at a big Japanese bank.
“At the same time, there is hardly any alternative to Treasuries
in flight-to-quality buying. So Treasuries are expected to stay
firm.”

* Benchmark 10-year notes slid 7/32 in price to yield 3.289
percent (US10YT=RR: ), up nearly 2 basis points from late U.S.
trade on Tuesday. The yield hit a one-year low of 3.06 percent
last week.

* Two-year notes fell 1.5/32 in price to yield 0.794 percent
(US2YT=RR: ), up 2 basis points, while 30-year notes dropped 13/32
in price to yield 4.205 percent (US30YT=RR: ), up 1.5 basis points.

Investment Analysis

(Reporting by Rika Otsuka; Editing by Chris Gallagher)

TREASURIES-Fall in Asia as traders trim longs before data