* Upbeat overseas data soothe anxiety about global growth
* ECB member Mersch remark on ABS revive safehaven bids for
bonds
* U.S. Treasury to sell $24 billion 10-year notes
* Fed to buy $3.00-$3.75 bln bonds due 2019-2020
By Richard Leong
NEW YORK, May 8 (Reuters) - U.S. Treasuries prices held
steady on Wednesday with benchmark yields hovering at three-week
highs in advance of $24 billion in 10-year government debt
supply.
Longer-dated yields rose earlier on surprisingly strong
Chinese trade and German industrial data which reduced concerns
about a global slowdown. They later retreated after comments
from a top European policymaker on limits about future stimulus
that revived some safehaven bids for bonds.
"We are in a broad trend to buy the dips," said Larry
Milstein, head of agency and government bond trading at R.W.
Pressprich & Co. in New York.
While benchmark yields have risen in the wake of a
better-than-expected U.S. jobs report last Friday, they remained
little changed from a month earlier as skepticism lingered over
the global economy and solution to the fiscal morass in Europe,
they said.
"We'll probably see more weakness here and overseas over the
next few months. I think this is an opportunity to buy into the
10-year auction," Milstein said
Benchmark 10-year Treasury notes last traded up
1/32 in price to yield 1.7743 percent, while the 30-year bond
was up 1/32, yielding 2.9958 percent.
Bond yields rose to session highs earlier in reaction to
data that showed growth in China's exports and imports in April
and German industrial output in March beat expectations,
reducing jitters about the world's second biggest economy and
euro zone's largest economy.
They retreated as buying in the wake of European Central
Bank executive board member Yves Mersch's comments that the ECB
will not subsidise markets with asset purchases.
Market News earlier reported the central bank has no program yet
to purchase asset-backed securities.
Mersch's comment pared optimism about this targeted ECB
stimulus scheme which some had thought might help jumpstart the
euro zone economy.
Also, supporting U.S. bond yields was the Federal Reserve's
regular purchases of Treasuries for its stimulus program, known
as QE3. The central bank bought $3.65 billion in government debt
due Feb 2019 to April 2020 on Wednesday.
Later at 1 p.m. (1700 GMT), the U.S. Treasury Department
will sell $24 billion in 10-year debt, the second leg of this
week's $72 billion in the Treasury's quarterly refunding.
In "when-issued" activity, traders expected the upcoming
10-year note issue to sell at a yield of 1.819
percent, higher than the 1.795 percent yield on the 10-year debt
auctioned in April.
