Bond prices lower

US Treasuries prices fell for a second straight day on Tuesday, pressured by corporate bond sales, while demand for relatively high US yields and anticipation of Friday's US jobs report capped losses. Pharmaceutical company Actavis Plc launched a $21 billion corporate bond deal, the second-largest on record, according to Thomson Reuters unit IFR. Analysts said investors sold some safe-haven Treasuries in order to buy some of the debt and that the size of the sale could balloon to $30 billion if demand exceeds expectations.
In addition, triple-A-rated Exxon Mobil Corp on Tuesday announced plans to sell $7 billion in corporate bonds, according to IFR. "It's still a lot of paper that the market has to digest," said Kim Rupert, managing director of global fixed income at Action Economics in San Francisco, on the corporate supply.
Continued demand for higher US bond yields compared with those from Europe, however, supported Treasuries prices and prevented a steeper sell-off. Yields move inversely to prices. Benchmark 10-year US Treasury note yields were last at 2.12 percent after hitting a more than one-week high of 2.13 percent, their highest since February 23. German 10-year Bund yields were last at 0.38 percent, not far from a record low of 0.28 percent hit on February 26.
Traders' reluctance to make major bets ahead of Friday's US nonfarm payrolls report, which economists polled by Reuters expect will show an increase in 240,000 jobs in February, also kept prices steady. That estimate would mark a decrease from a gain of 257,000 jobs in January. "If you look at US data, it has actually been getting weaker," said George Goncalves, head of US rates strategy at Nomura Securities International in New York. "The only thing that looks good is jobs data. So there might be some payback, and I think that's one of the reasons why the bond market is not really selling off."
US 30-year Treasury bonds were last down 18/32 in price to yield 2.71 percent, from a yield of 2.69 percent late Monday. US five-year notes were last down 4/32 in price to yield 1.61 percent after hitting a nearly two-week high of 1.6171 percent earlier in the session. US three-year notes were last down 2/32 in price to yield 1.07 percent, from a yield of 1.05 percent late Monday.