Il report dice che i bonds son pronti per il rialzo FED (
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) , le attenzioni saranno rivolti ai commenti post-annuncio, si teme possa mancare la consueta parola magica - misurato-
US Treasuries ready for Fed hike, wary of language
By Wayne Cole
NEW YORK, Feb 2 (Reuters) - U.S. Treasury debt prices were flat and trade almost at a standstill on Wednesday ahead of an expected Federal Reserve rate hike later in the session.
The market also has to prepare for a big dollop of debt after the Treasury announced $51 billion of issuance for next week's quarterly refunding. The Treasury will sell $22 billion of three-year paper, $15 billion of five-year notes and $14 billion of 10-year debt from Tuesday to Thursday respectively.
With so much debt to take on board the market is hoping the Fed doesn't rock the boat today. A quarter point hike to 2.5 percent is fully priced in but there are worries the central bank might hint at a more hawkish stance in its post-meeting statement, due at 2:15 p.m. (1915 GMT).
Some even feared it would drop a reference to tightening at a "measured" pace. Richard Gilhooly, fixed-income analyst at BNP Paribas, believes the Fed will retain the phrase given recent economic data had erred on the soft side of forecasts.
"Risks should remain balanced, but the characterization of the recent labor market data and GDP will be key as to whether the Fed is gently shifting its assessment of the outlook," Gilhooly said.
"On balance, we expect the statement to be neutral for the front end, positive for equities and negative for longer-dated Treasuries, especially with supply next week," he added.
Investors were clearly being cautious in early trade and keeping prices in a very tight range. The benchmark 10-year notes <US10YT=RR> was up 1/32 in price, leaving yields at 4.14 percent.
Two-year notes <US2YT=RR> were steady at 3.28 percent, as was the five-year note <US5YT=RR> at 3.71 percent.
Yields on the 30-year bond <US30YT=RR> were hovering around 4.59 percent, having touched a 1-1/2 year trough of 4.57 percent on Tuesday.
The spread between two- and 10-year yields held near four-year lows at 85 basis points, having now contracted almost 40 basis points since Christmas.
There were no major U.S. economic data due Wednesday, leaving analysts to ponder the implications of weak auto sales figures released late Tuesday.
The data showed sales of North American-made autos skidded 11.2 percent to an annual 13.0 million in January, reversing all December's incentive-driven jump to 14.64 million.
"Because of the decline in sales, both headline retail sales and consumer spending for January will be weak," said Steve Wood, chief economist at Insight Economics.
He suspected real consumer spending would rise much more slowly this quarter than the 4.6 percent rate seen last quarter. "We estimate real consumption expenditures in Q1 at around 3 percent," said Wood.
Late on Wednesday, around 9:00 p.m. (0200 GMT), President George W. Bush gives his State of Union address. Aides say he will concentrate on Iraq and Social Security.
Reports suggest he will also call for a near freeze in the growth of government spending outside defense, but offer few other specifics on how the administration plans to halve the budget deficit.