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TREASURIES-Prices steady to higher ahead of 10-year note auction

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Published: Wednesday, 9 Jan 2013 | 9:48 AM ET
By: Chris Reese

* Yields back off 8-month highs reached last week

* Treasury to sell $21 bln of 10-year notes

* 30-year bond yields ease back toward 3 pct

NEW YORK, Jan 9 (Reuters) - U.S. Treasury debt was trading steady to slightly higher in price on Wednesday ahead of the sale of $21 billion of 10-year notes and with little in the way of potentially market moving economic data on the docket. Yields have generally been easing since hitting an eight-month high on Friday, after minutes from the Federal Reserve's December policy meeting sparked some worries the central bank could pare back its assets purchases sooner than some analysts were expecting if the economy improves enough. Investors were moving to take back some of last week's price losses, although gains were limited by a reluctance to push yields significantly lower heading into this week's debt auctions. Benchmark 10-year Treasury notes were trading 1/32 higher in price to yield 1.86 percent, down slightly from 1.87 percent late Tuesday, while 30-year bonds were 3/32 higher in price with their yield to yield 3.06 percent from 3.07 percent. "Three days of low volatility and a continued grind lower in yield, through the 3.08 percent breakdown area from Thursday, appears to be setting up for a post-auction shift to a lower yield range under 3 percent in bonds," said Richard Gilhooly, interest rates strategist at TD Securities in New York. Thirty-year bond yields on Friday rose to 3.18 percent, marking the highest since late April. The Treasury will sell $21 billion of 10-year notes on Wednesday and $13 billion of 30-year bonds on Thursday. The sale of $32 billion of three-year notes on Tuesday saw strong non-dealer bidding. The high yield was 0.385 percent, in line with expectations.

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NEW YORK, Jan 9- U.S. Treasury debt was trading steady to slightly higher in price on Wednesday ahead of the sale of $21 billion of 10- year notes and with little in the way of potentially market moving economic data on the docket.

   
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