Bonds Firm in Asia After Strong Auction

U.S. Treasury prices were firm in Asia on Thursday after they rallied following a solid 10-year bond auction the previous day, as uncertainty over the global economic outlook pushed Wall Street shares to one-month lows.

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The yield on 10-year notes stood at 1.677 percent, little changed from the previous U.S. close, but near its lowest level since Friday after the strong auction results triggered a wave of short-covering.

Concerns over the health of the global economy and earnings downgrades led to strong demand at the sale of $21 billion 10-year notes on Wednesday.

Traders are now looking to the auction of $13 billion, 30-year bonds later in the day, the last leg of this week's $66 billion coupon-bearing offerings.

"If today's 30-year bond auction turns out to be strong just like yesterday's 10-year auction, the market is likely to advance further," said Tomoaki Shishido, fixed income analyst at Nomura Securities.

Wall Street shares fell on Wednesday as disappointing earnings from Chevronand Alcoa, enhanced worries that the slowdown in the global economy may force more companies to downgrade their earnings. The S&P 500 index fell 0.6 percent to a one-month closing low.

Some market players are looking to the U.S. vice presidential debate later in the day as President Barack Obama's victory, once almost taken for granted in markets, is coming into question after his weak performance in last week's debate.

	Price		Change	%Change
US 10-YR		---
US 2-YR		---
US 5-YR		---
US 30-YR		---
US 3-MO		---