TREASURIES-Prices end year lower as fiscal deal seen near
* Treasuries prices end lower as fiscal deal seen closer
* 10-year ylds end slightly lower than in 2011, 30-yr ylds higher
* Fed will buy $45 bln in Jan in new quantiative easing program
NEW YORK, Dec 31 (Reuters) - U.S. Treasury debt prices eased on Monday with long, 30-year bonds falling over a point in price as lawmakers in Washington came closer to reaching an agreement to avert the "fiscal cliff." Treasuries have gained in the past two weeks as worries that tax increases and spending cuts due to kick in this week will harm economic growth. With a deal closer to getting done, Treasuries are expected to sell off as investors return to riskier assets including stocks on hopes economic growth will gain momentum. "Things look a lot closer to something getting done than we previously thought, so the back end of our market is trading a little heavy," said Rick Klingman, managing director in Treasuries trading at BNP Paribas in New York. The move left benchmark 10-year Treasuries notes yields ending the year only marginally lower than where they ended a year earlier on the last trading day of 2012. The notes ended the day down 14/32 in price to yield 1.76 percent, down from 1.88 percent at the end of 2011. Thirty-year bonds fell 1-16/32 in price to yield 2.95 percent, up from the 2.89 percent where they had ended 2011. While a deal seemed closer, some market participants were still wary that there will be a near-term resolution to the problem of fixing the deficit and resolving differences over the tax code and government spending. "At some point they will do something, but I don't think they are going to do enough that the whole debate is behind us," said Lou Brien, market strategist at DRW trading in Chicago. "Given the fiscal state of the country, taxes will be higher and spending lower to some degree, that in and of itself is not friendly to the economy," he said. President Barack Obama said on Monday that a deal was within sight, but that there was more to be done, citing the need to balance spending cuts. The market is likely to remain focused on the "fiscal cliff" at least through the end of this week. "Nothing the president said here this afternoon is going to really have a permanent mark on the market until we actually get something through both houses We're actually pointing toward Thursday as the day that people will be back," said Jim Vogel, interest rate strategist at FTN Financial in Memphis, Tennessee. U.S. economic data is also likely to come back into focus with the closely watched payrolls employment report due on Friday. "For the next week payrolls and Washington are the two main drivers of the market," said BNP's Klingman. Employers are expected to have added 145,000 jobs to their payrolls in December, according to the median estimate of economists polled by Reuters. Treasury bill rates also continued to fall on Monday, with some near-term maturities trading at negative yields, on strong demand from investors tidying balance sheets for year-end. The Federal Reserve also said on Monday that it will buy $45 billion in debt maturing from 2017 to 2042 in January as part of its new quantitative easing program meant to reduce long-term borrowing rates and stimulate the economy. The Treasury market closed early at 2 p.m. EST (1900 GMT) on Monday ahead of the New Year's Day holiday on Tuesday.