US Treasuries stayed firm in Asia on Friday after downbeat US economic data, as investors looked ahead to weekend meetings of the World Bank and International Monetary Fund for the latest developments on containing Europe’s debt crisis.
* A better-than-feared outcome of a Spanish debt auction failed to vanquish anxiety about the euro zone’s ability to finance its debt, which continued to underpin Treasuries. The yield on 10-year Spanish bonds rose after the debt sale, suggesting investors remain concerned.
* The International Monetary Fund is likely to achieve the touted $400 billion boost to its financial firepower to contain the euro zone debt crisis, Japan’s finance minister Jun Azumi said on Thursday.
* “If the IMF manages to raise its targeted amount, there would be no market impact, but if it falls short, or if some other problems arise, then the risk-off sentiment would be good for Treasuries,” said Hiroki Shimazu, an economist in Tokyo at SMBC Nikko Securities.
* Investors also awaited an election in France on Sunday, in which President Nicolas Sarkozy will face Socialist Francois Hollande, with opinion polls giving the challenger a double-digit lead for a May 6 runoff.
* The yield on the 10-year notes was at 1.96 percent, matching its level in late US trade, and below 1.98 percent in Asian trade on Thursday.
* The 30-year bond yield was at 3.12 percent, slightly up from 3.11 in late US trading but below 3.13 percent in Asia on Thursday.
* Thursday’s US economic data showed higher-than-forecast new US jobless claims last week, a slowdown in factory activity in the Mid-Atlantic region and a drop in US home resales.
* The data comes ahead of next week’s US Federal Reserve meeting on April 24-25 at which the central bank is not expected to take any new policy steps, but the latest economic indicators make the Fed more likely to reiterate its pledge to keep rates low and support the economy as long needed.