Treasuries fell for the first time in three days before an industry report that economists said will show consumer confidence climbed to the most since June, easing concern the economy will slip into a recession. Ten-year notes still headed for a weekly gain amid concern an agreement among European leaders to tighten budget rules and boost their crisis-fighting arsenal by 200 billion euros ($267 billion) will be insufficient to end the region’s debt crisis. Treasures also declined today as the U.S. prepares to sell $78 billion of securities next week. “If we are going to see positive data surprises in the U.S., then we could get some paring of the gains in Treasuries,� said Niels From, chief analyst at Nordea Bank AB in Copenhagen. “It could be a day split in two. This is going to be a long process of solving fundamental issues in the euro zone. The kneejerk reaction from the summit is risk off.� The benchmark 10-year yield climbed three basis points, or 0.03 percentage point, to 2 percent at 8:55 a.m. London time, according to Bloomberg Bond Trader prices. The 2 percent note due in November 2021 fell 9/32, or $2.81 per $1,000 face amount, to 99 31/32. The yield declined three basis points this week. The Thomson Reuters/University of Michigan index of consumer sentiment climbed to 65.8 in December from 64.1 the prior month, according to a Bloomberg News survey before today’s report. Fewer Americans filed applications for jobless benefits last week, the Labor Department said yesterday. Debt Sales The U.S. will auction $32 billion of three-year notes on Dec. 12, $21 billion of 10-year debt the next day and $13 billion in 30-year bonds on Dec. 14, the Treasury said yesterday. The government will also sell $12 billion of five- year Treasury Inflation Protected Securities on Dec. 15. The Federal Reserve is replacing $400 billion of shorter- maturity Treasuries in its holdings with longer-term debt to cap borrowing costs, in a plan it announced in September. It is scheduled to buy as much as $2.75 billion of securities due from 2036 to 2041 today as part of the program, according to the New York Fed’s website. Europe’s leaders agreed at their summit in Brussels to accelerate the start of a planned 500 billion-euro rescue fund and watered down bondholder loss-sharing provisions. They said the permanent rescue fund known as the European Stability Mechanism won’t get a banking license that would enable it to boost its firepower. European Central Bank President Mario Draghi hailed the accord, as U.K. Prime Minister David Cameron kept Britain out of the agreement. Ten-year yields will climb to 2.42 percent by the middle of 2012, according to a Bloomberg survey of financial companies, with the most recent forecasts given the heaviest weightings. To contact the reporter on this story: Lukanyo Mnyanda in London at lmnyanda@bloomberg.net; Wes Goodman in Singapore at wgoodman@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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