TREASURIES-Prices fall as riskier assets attract investors

* Safe-haven U.S. Treasuries lose out to riskier assets

* Strength in stock index futures weighs

* Focus on Fed meeting statement due Dec. 14

* Higher 2011 rate forecasts weigh on Treasuries

By Ellen Freilich

NEW YORK, Dec 13 (BestGrowthStock) – U.S. Treasuries fell in price
on Monday, as outlooks for stronger growth and higher interest
rates in 2011 drew investors to riskier assets at the expense
of safe-haven U.S. government debt.

Government data released late last week suggested
stronger-than-expected economic growth in the fourth quarter
and easing deflation risk.

“A number of banks and securities dealers have forecasted
significantly higher rates for next year and that has led to
higher yields,” said Thomas di Galoma, head of fixed-income
rates trading at Guggenheim Securities in New York.

Bond dealers sold Treasuries to lock in yields on the
corporate bonds they will underwrite this week, and strength in
U.S. stock index futures also weighed on Treasuries prices.

U.S. stock index futures rose after China held interest
rates steady over the weekend despite high inflation pressure.

The benchmark U.S. 10-year Treasury note yield (US10YT=RR: )
briefly pushed above 3.375 percent.

That constituted a nearly two-thirds retracement of its
May-to-December move, di Galoma said.

In morning trade, the 10-year Treasury note was down 9/32,
its yield at 3.364 percent.

“The focus this week will be limited liquidity because of
year-end and the FOMC meeting tomorrow,” Di Galoma said.

Treasury yields are in a swirl of cross-currents a day
ahead of the Federal Reserve’s December policy meeting. The
U.S. central bank’s $600 billion stimulus plan was supposed to
lower interest rates. But U.S. President Barack Obama’s tax
deal with Republicans has pushed yields higher because it will
likely stimulate economic growth.

Benchmark U.S. yields are now at six-month highs.

Meanwhile, the Fed will continue to support the Treasury
market. The New York Fed said Friday the Fed will purchase
about $105 billion of Treasury and Treasury inflation-protected
securities in 18 operations from Dec. 13 through Jan. 11.
(Editing by Jeffrey Benkoe)

TREASURIES-Prices fall as riskier assets attract investors