TREASURIES-Bonds slip as investors choose riskier assets
NEW YORK, Nov 6 (Reuters) - U.S. Treasuries prices slipped on Tuesday as investors chose riskier assets like stocks over safe-haven U.S. debt as Americans went to the polls to vote for president and other representatives. With a presidential race frequently described as close, but which some experts believe President Barack Obama is heavily favored to win, stocks rose, as they have since the beginning of Obama's term. Bonds have also rallied over the last four years, but the bid for safety eased on Tuesday as traders positioned for a Treasury auction of three-year notes. ``There's some consolidation following yesterday's gains,'' said Kevin Flanagan, chief fixed income strategist at Morgan Stanley Smith Barney with $1.7 trillion in assets under management. ``The 3-year auction should go fine, but tomorrow's 10-year becomes more interesting given it's the first post-election auction.'' Flanagan said the U.S. Treasury market would ``respond in a knee-jerk fashion,'' no matter what result the elections produce. ``The question is in what direction. At first blush, a Romney win would be viewed less favorably by Treasuries,'' he said. The small dip in Treasuries prices should be no surprise heading into the auction of $32 billion of 3-year notes in the afternoon, Cantor Fitzgerald said in a note. ``Overall we are expecting a fairly quiet session with light volumes ahead of the election returns,'' said Cantor market analyst Justin Lederer. ``We expect today's three-year (auction) to go fairly smoothly, but would not be surprised by a small concession ahead of the auction close at 1 p.m. (Eastern time).'' The two most recent three-year auctions drew strong demand, Lederer added. As part of the Federal Reserve's accommodative monetary policy aimed at supporting the economic recovery and cutting unemployment, the New York Fed said it was buying Treasuries on Tuesday with maturities ranging from November 2018 to August 2020. Benchmark U.S. 10-year notes rose 0/32 in price, driving their yields to 1.69 percent from 1.72 percent late on Friday. Yields are in the middle of their recent trading range but toward the lower end of their year-long range between 2.38 percent and a record low of 1.38 percent. Thirty-year Treasury bonds rose 24/32, their yields easing to 2.88 percent from 2.91 percent late on Friday. In the background, jitters over Greece's economic future were likely to continue to underpin demand for U.S. debt. Tens of thousands of Greek workers began a 48-hour strike on Tuesday to protest a new round of cuts that unions say will devastate the poor and cause a failing economy to collapse. Lawmakers vote on Wednesday on the plan to unlock more international aid.