×

TREASURIES-Bonds steady ahead of refunding announcement, Fed meeting

* Treasury expected to announce larger auction sizes Wednesday

* Fed meeting, tax bill in focus

NEW YORK, Oct 31 (Reuters) - U.S. Treasury prices were steady on Tuesday as investors awaited a busy three days that include a heavy slate of data and events that market participants expected could prompt some volatile moves. Events scheduled on Wednesday include the Treasury Departments refunding plans, the conclusion of the Federal Reserves two-day policy meeting, and the likely introduction of a tax bill. The Treasurys refunding announcement will be watched because the government is expected to increase the size of its regular auctions as it faces higher funding needs from a widening deficit and as the Fed reduces its balance sheet. We expect to see the first increases in coupon auction sizes since 2009, said Michael Cloherty, head of U.S. rates strategy at RBC Capital Markets in New York. There will likely be lot of focus on the supply change, both because they are very large going forward and because global central banks are backing away from markets, Cloherty said.

Benchmark 10-year notes were last unchanged on

the day to yield 2.37 percent. Long-dated bond yields fell on Monday after Bloomberg quoted Treasury Secretary Steven Mnuchin saying that the government does not see a lot of demand for ultra-long bonds. The U.S. central bank is expected to leave interest rates unchanged when it concludes its two-day policy meeting on Wednesday, but investors will be watching for any new indications that a rate hike is likely in December. Republicans in the U.S. House of Representatives may also introduce a long-awaited tax bill on Wednesday, though lawmakers were still grappling with key provisions on Monday and some lobbyists expressed concern that legislation might not be ready as expected. President Donald Trump is expected to announce his choice for new Fed chair on Thursday, with news reports indicating that Federal Reserve Governor Jerome Powell is likely to get the nomination. Economic data is also in focus with manufacturing data on Wednesday and the jobs report for October on Friday.

(Reporting by Karen Brettell; Editing by Jonathan Oatis)

)