Treasuries edge up

US Treasuries prices ended slightly higher on Tuesday as investors waited on key employment data scheduled for later this week and as Spain appeared to be on track, if not yet ready, to get assistance to ease its debt crisis. Spain's Prime Minister Mariano Rajoy said on Tuesday that a request for European aid was not imminent but that he had agreed with Spanish regional leaders on a fiscal consolidation path for next year.
With the situation in Spain appearing stable and no other large market moving events, Treasuries prices were largely unchanged. "We're basically taking a breather today," said James Newman, head of Treasuries and Agency trading at Keefe, Bruyette and Woods in New York.
The ADP employment report on Wednesday will be closely watched as a guide to Friday's payrolls employment number, which is expected to show that employers added 113,000 jobs in September, the second last report before November's presidential election. Economists also expect that data on Friday will show that the unemployment rate ticked up in the month to 8.2 percent from 8.1 percent in August.
"I think everyone is going to be flat, to slightly long, expecting a weak number," said Newman. The release of minutes on Wednesday from the Federal Reserve's September policy meeting is also unlikely to hold any large surprises, he added. "It's pretty safe to say that the FOMC minutes will be fairly dovish. I think that's all baked in," Newman said.
US government bond prices fell earlier on Tuesday after an unexpected rate cut by Australia's central bank temporarily gave riskier assets an edge over safe-haven US debt. "Australia eased, which wasn't particularly expected, so that gave the 'additional-stimulus-will-help-growth' crowd a bit of a boost," said John Briggs, a Treasury strategist at RBS Securities in Stamford, Connecticut.
Benchmark 10-year notes were last up 2/32 in price to yield 1.61 percent, after earlier rising as high as 1.65 percent. The Federal Reserve also bought $1.89 billion in debt maturing between 2036 and 2042 on Tuesday, out of $4.20 billion submitted for purchase, as part of its Operation Twist program.