TREASURIES-Bonds dip on bright stocks outlook

(Reuters) - NEW YORK, July 23 - U.S. Treasuries eased on
Monday, pulling benchmark yields back from recent six-week lows
as a firm equities outlook signaled at least a temporary
recovery in other markets from last week's subprime credit
scare.




Financial market losses related to subprime, the mortgage
sector that targets borrowers with poor credit, led to a flight
to quality by investors into Treasuries last week, giving
10-year notes their best rally since since March.


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Treasuries Little Changed Before Government Report on U.S. Retail Sales

(Bloomberg) -- U.S. Treasuries were little changed
before a government report that will probably show retail sales
declined last month, suggesting a housing slump and higher fuel
costs are contributing to weaker economic growth.

Standard & Poor's and Moody's Investors Service prompted
the biggest surge in Treasuries in more than four months on July
10 after they warned about the credit quality of U.S. subprime
mortgages. Benchmark 10-year notes have pared their gains in the
past two days as a rebound in global stock markets eased demand
for less risky assets such as government debt.


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U.S. Treasury Notes Decline; Stock Gains Signal Demand for Riskier Assets

(Bloomberg) -- U.S. Treasuries fell for a third day
as a global rally in stocks extended to Asia, suggesting waning
demand for the relative safety of government debt.

Treasury notes added to losses from yesterday, when the
Standard & Poor's 500 Index rose to a record and Federal Reserve
Bank of San Francisco President Janet Yellen said employment
growth is ``robust.'' The comment helped ease concern that
losses tied to bonds backed by subprime mortgages will dent
economic growth.


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Treasuries Rise on Speculation Subprime Defaults to Slow Economic Growth

(Bloomberg) -- U.S. Treasuries rose on speculation
losses on debt backed by subprime mortgages will exacerbate a
housing slowdown and curb economic growth.

The yield on benchmark 10-year notes fell 2 basis points to
5.07 percent as of 9:37 a.m. in London, according to bond broker
Cantor Fitzgerald LP. The price of the 4 1/2 percent security
due in May 2017 rose 5/32, or $1.56 per $1,000 face amount, to
95 10/16. A basis point is 0.01 percentage point.


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Japan's 10-Year Bonds Have Biggest Weekly Drop in Month Amid Global Growth

(Bloomberg) -- Japanese bonds had the biggest
weekly drop in a month on speculation signs of accelerating
global growth will support the central bank's case for
increasing interest rates.

Ten-year bonds fell yesterday, pushing yields to a
three-week high, after U.S. Treasuries had the biggest loss
in three weeks on July 5. Private U.S. reports this week
showed job creation was faster than expected and growth in
service industries accelerated, signaling the world's
largest economy is gaining momentum.


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Japan's Government Bonds May Rise as Terror Threats Spur Flight to Safety

(Bloomberg) -- Japan's 10-year bonds may advance
after terrorist plots in the U.K. spurred demand for the
relative safety of government debt in the U.S. and Europe.

Local bonds may follow gains in U.S. Treasuries, which rose
yesterday on speculation over potential terror threats and
weakness in the subprime mortgage market. Ten-year Treasury
yields, which yesterday dropped below 5 percent for the first
time in three weeks, had a 0.87 correlation with Japanese yields
in the past year, according to data compiled by Bloomberg.


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Agency Mortgage Bonds Have Worst Month Since July 2003, Lehman Index Shows

(Bloomberg) -- Mortgage-backed bonds guaranteed by
Fannie Mae, Freddie Mac and Ginnie Mae, a $4 trillion market
that rivals the scope of U.S. Treasuries, underperformed last
month by the most since July 2003 as investors sought the safety
of government debt and interest rates became more volatile.

So-called agency mortgage bonds in June returned
0.53 percentage points less than U.S. Treasury notes with
maturities similar to their expected lives, a Lehman Brothers
Holdings Inc. index shows.


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U.S. 2-Year Yield Is Near Lowest Since May; Housing Slump Dents Confidence

(Bloomberg) -- U.S. Treasuries were little changed,
with two-year yields near their lowest since May, before a
Commerce Department report that economists say will show new
home sales fell.

A separate private survey today may show consumer
confidence dropped, adding to expectations the Federal Reserve's
next move will be to cut interest rates. Demand for the relative
safety of U.S. government debt also rose on concern hedge fund
losses linked to mortgage defaults will spread.


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Japan's 10-Year Bonds Advance After Treasuries Gain on Flight to Safety

(Bloomberg) -- Japan's government bonds rose after
U.S. Treasuries gained last week as investors sought a haven
from possible hedge fund losses.

Ten-year bonds climbed for a second day as the Nikkei 225
Stock Average fell on concern losses in the U.S. subprime market
will be worse than expected, triggering a decline in global
stocks. Treasuries, which often lead Japan's bond prices, rose
June 22 after Bear Stearns Cos. offered to provide $3.2 billion
in loans to bail out one of its money-losing hedge funds.


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Japan's Government Bonds Head for Weekly Loss on Outlook for Global Growth

(Bloomberg) -- Japan's five-year government notes
headed for a weekly decline as signs of global growth prompted
investors to raise bets interest rates will rise.

Five-year yields headed toward a record high touched last
week as a report yesterday showed the Philadelphia Federal
Reserve Bank's factory index jumped to the highest in more than
two years in June, sending U.S. Treasuries lower. Bank of Japan
Deputy Governor Toshiro Muto yesterday said the world's second-
largest economy is expanding moderately and the bank will raise
rates gradually based on conditions in the economy and prices.


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Japan's Government Bonds May Decline on Speculation Export Demand to Grow

(Bloomberg) -- Japan's government bonds may fall, set
for a fifth weekly drop, as signs of global growth and inflation
prompted investors to raise bets interest rates will rise.

Ten-year bonds may complete their longest losing streak since
April 2006 after the Philadelphia Federal Reserve Bank's factory
index jumped to the highest in more than two years in June,
sending U.S. Treasuries lower. Japan's benchmark yields last week
touched 1.985 percent, the highest since July.


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GLOBAL MARKETS-Rising yields hit European stocks, drive dollar

(Reuters) - Overnight losses in U.S. Treasuries -- where the 10-year
yield is now around 5.159 percent -- carried over
into euro zone government debt, unnerving investors concerned
about higher interest rates and borrowing costs.




World yields as calculated through Citi's world government
bond index are at levels last seen in early 2001.


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JGBs fall on BOJ rate view, short covering stalls

(Reuters) - Futures initially pulled further away from a seven-year low
as the market followed a gain in U.S. Treasuries, only to run
into selling by domestic banks, market participants said.




"A Treasury-led rise in early trade had its limitation as the
market continues to expect the BOJ to boost interest rates in
coming months," a senior trader at a European brokerage said.


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JGB futures climb on Fukui, Treasury gains boost

(Reuters) - A rally in U.S. Treasuries on Friday also encouraged market
players to cover short positions in JGBs, which had been sold off
in the previous four weeks on a spike in global bond yields, as
well as on worries of a BOJ rate hike as early as July.




Fukui said the central bank wanted to be more convinced of
the sustainability of capital spending and consumption before
changing monetary policy, relieving some who had been worried
about an interest rate hike next month.


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U.S. Treasuries Rebound; Investors Say Yield at Five-Year High Attractive

(Bloomberg) -- U.S. Treasuries rose as some Asian
investors said benchmark yields at a five-year high are
attractive given the outlook for inflation.

``We don't have any concern about inflation risk,'' said
Masataka Horii, one of the managers for the $46 billion Kokusai
Global Sovereign Open fund in Tokyo. The fund, which has about
24 percent of its portfolio invested in Treasuries, bought some
U.S. notes in the past month, he said.


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TREASURIES-Stock slide underpins rebound in battered bonds

(Reuters) - NEW YORK, June 6 - U.S. Treasuries rose on
Wednesday as sagging stocks helped stem a month-long selling
spree that has taken yields within a sliver of 5 percent.




Major Wall Street indexes were down about 0.7 percent,
helping government debt gain a foothold.


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U.S. Treasury Yields Near the Highest in Nine Months Attract Investors

(Bloomberg) -- U.S. Treasuries rose as yields near
the highest in more than nine months attracted investors after
more than four weeks of losses.

The two-year security's yield touched 5 percent yesterday
for the first time since August as futures traders reversed bets
the Federal Reserve would lower interest rates this year. Sandra
Pianalto, president of the Fed's Cleveland Bank, said U.S.
inflation is faster than she'd like.


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Treasury Yields Near Nine-Month High of 5 Percent May Entice Investors

(Bloomberg) -- U.S. Treasuries may rise on
speculation yields near a nine-month high of 5 percent will
attract buyers.

The notes rose yesterday, pushing two-year yields to 5
percent and those on the 10 year to 4.99 percent, as a report
showed U.S. service industries last month grew at the fastest
pace since April 2006. Goldman Sachs Group Inc. said yesterday
that it no longer expects the Federal Reserve to lower borrowing
costs this year and revised its economic growth forecast higher.


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Japan's Government Bonds Little Changed Before Sale of 10-Year Securities

(Bloomberg) -- Japanese bonds were little changed
before the Ministry of Finance's sale of 10-year debt today.

The government set the highest coupon in seven months for
its 1.9 trillion yen ($15.6 billion) auction of the debt, in
line with a Bloomberg News survey of traders, analysts and
investors. U.S. Treasuries yesterday rose the most in three
weeks, narrowing the yield premium over Japanese debt, according
to Bloomberg data.


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Treasuries Increase After May Job Growth Is Less Than Forecast in the U.S.

(Bloomberg) -- U.S. Treasuries rose the most in
almost three weeks after a report showed private-sector job
growth was less than forecast this month.

Lehman Brothers Holdings Inc. and Action Economics are among
firms that lowered expectations for job growth two days before
the Labor Department's employment report for May. Futures traders
raised bets the Federal Reserve may lower borrowing costs if
employment growth slows.


Read more at Bloomberg Bonds News