TREASURIES-Steady in Asia; CPI, jobless claims eyed

TOKYO, March 18 (BestGrowthStock) – U.S. Treasuries were steady in
Asia as investors awaited figures on consumer inflation and
weekly jobless claims to assess the state of the economy.

* A hefty drop in producer prices lifted longer-dated
Treasury prices the previous day as the data supported views that
the Federal Reserve will not raise its low interest rates in the
near term due to tame inflation. [ID:nN17150095]

* Next on traders’ radar screens is the U.S. consumer price
index for February due later in the day. Economists expect CPI to
have risen 0.1 percent, compared with a 0.2 percent increase in
January. Excluding food and energy items, CPI is expected to have
increased 0.1 percent versus a 0.1 percent drop the prior month.
(ECONUS: )

* First-time claims for jobless benefits for the latest week
and the Philadelphia Federal Reserve Bank’s March business
activity index for February is also due on Thursday.

* “Some investors expect the yield curve to flatten due to
subdued inflation. So if CPI rises more than forecast, they are
likely to sell longer-dated bonds,” said a trader at a Japanese
asset management company.

* The spread between yields on 10-year notes (US10YT=RR: )
and two-year notes (US2YT=RR: ), a gauge of the market’s inflation
expectations, narrowed to 272 basis points on Wednesday, the
tightest so far this year. The spread stayed around that level on
Thursday.

* T-note futures were steady at 117-11.5/32 (TYv1: ). The
benchmark 10-year notes were little changed in price to yield
3.642 percent (US10YT=RR: ).

* Treasury will announce the details for next week’s auctions
of two-, five-, and seven-year notes.

Investment Basics
(Reporting by Kaori Kaneko; Editing by Chris Gallagher)

TREASURIES-Steady in Asia; CPI, jobless claims eyed