* Spain bailout talk, Australia rate cut weigh
* Riskier assets favored over safe-haven U.S. debt
* Trade in narrow range ahead of Friday's U.S. payrolls data
By Ellen Freilich
NEW YORK, Oct 2 (Reuters) - U.S. Treasuries prices fell on Tuesday as talk of Spain's willingness to seek a bailout and an unexpected rate cut by Australia's central bank favored riskier assets over safe-haven U.S. debt.
Spain is said to be ready to request a euro zone bailout for its public finances though not, according to Spanish media, as soon as this weekend. However, European officials say Germany has signal led Spain should hold off.
An aid request from Spain would pave the way for the European Central Bank to buy Spanish bonds.
"This sense of a better environment for risk assets is taking a small shine off rates," said John Briggs, Treasury strategist at RBS Securities in Stamford, Connecticut.
A largely unexpected quarter-point rate cut to 3.25 percent by Australia's central bank also favored risk assets over safe havens like German bunds and U.S. Treasuries.
"Australia eased, which wasn't particularly expected, so that gave the 'additional-stimulus-will-help-growth' crowd a bit of a boost," Briggs said.
A Reuters article reporting that Spain was willing to ask for aid was also seen as a positive development for riskier assets and a negative for safe-haven Treasuries, he said.
Consequently, riskier Spanish bond yields
eased about 15 basis points and the spread between Spanish and safe-haven German bunds narrowed by about 18 basis points.
Still, Briggs said, the market is essentially recording small movements "within the framework of waiting for (September U.S.) payrolls data on Friday."
Economists polled by Reuters estimated nonfarm payrolls added 113,000 jobs in September.
Technical charts showed the recent rally in Treasury futures, which rose two points in the last two weeks of September, may be running out of steam and vulnerable to further falls.
(Editing by James Dalgleish)
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((-------------- MARKET SNAPSHOT AT 0916 EDT (1316 GMT) ---------------------
Change vs Current Nyk yield Three-month bills 0.090 (-0.005) 0.091 6-month bills 0.140 (-0.005) 0.142 Two-year note 100-00/32 ( unch ) 0.242 Five-year note 99-31/32 (-01/32) 0.628 10-year note 99-27/32 (-05/32) 1.642 30-year bond 98-12/32 (-08/32) 2.831 ))
Keywords: MARKETS USA BONDS/