Treasuries mostly steady

US Treasuries prices were little changed on Wednesday after two days of losses as traders awaited possible monetary policy shifts by the European Central Bank and a key report on US unemployment. But yields on 30-year Treasuries dropped below 3 percent in late trading as institutional investors unwound positions in government securities cued to big corporate debt deals by online retailer Amazon and others.
Hedging against expected exposure to corporate deals sometimes pressures bonds, as investors conduct trades known as "rate-locking" that involves selling Treasuries to offset coming purchases of corporate bonds. "The release of those pressures today are allowing the more natural buyers to emerge," said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott in Philadelphia.
Insurers and other traditional buyers of 30-year Treasuries were attracted by the long bond's yield that has hovered around 3 percent on Wednesday, according to traders and strategists. Yields on the 30-year last stood at 2.9865 percent, reflecting an 11/32 increase in price. The benchmark 10-year Treasury was last up 1/32 to yield 2.2817 percent. Shorter maturities were flat or off a little in price.
"The market is pretty much in lockdown mode," said Eric Green, head of US rates and research at TD Securities in New York. European Central Bank policymakers meet on Thursday and may announce asset buying, interest rate changes or other policy moves meant to help Europe's slumping economy. Traders also focused on Friday's key monthly US unemployment report, which often moves markets. Economists polled by Reuters see the November unemployment rate at 5.8 percent, unchanged from October, and expect an increase of 230,000 in nonfarm payrolls.
US government debt prices turned up briefly after a survey of US private employers on Wednesday showed jobs being added at a brisk pace. But other data showed sharp downward revisions to workers' pay in the second and third quarters, suggesting the Federal Reserve has room to maintain its low interest rate policy for a while.