Reply #75: U.S. Treasuries ease as 3-year note auction nears

[UpInArms]

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-07T161023Z_01_N07392379_RTRIDST_0_MARKETS-BONDS-UPDATE-1.XML

NEW YORK, Feb 7 (Reuters) - U.S. Treasuries turned lower on Tuesday as investors prepared for a barrage of debt auctions later in the day, starting with a $21 billion offering of three-year notes.

Following Tuesday's auction, the U.S. Treasury will issue $13 billion of 10-year debt on Wednesday and $14 billion of 30-year bonds on Thursday in the first issuance of the long bond since August 2001.

Traders and analysts are all but certain the 30-year bond will attract heavy buying. But they were more cautious about the other two legs of the auction.

"The whole refunding should go reasonably well," said Alan De Rose, a trader with CIBC World Markets in New York. "Yields are still 15 to 17 basis points higher than they were two weeks ago, so that's part of the (price) concession."

The 30-year bond, which has enjoyed sometimes-heavy bidding in the last two sessions in the run-up to Thursday's auction, eased 15/32 in price to yield 4.656 percent, up from 4.625 percent on Monday. Traders said the declines reflected a dearth of buyers following the recent demand, and nothing more.

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