TREASURIES-Prices slip on corporate issuance before Fed meeting
* Corporate issuance and related rate-lock selling cited
* Two-day Fed meeting in focus; statement due Wednesday
* Fed statement to be analyzed for hints of tapering timeline
* Q2 GDP, GDP revisions, ISM, monthly jobs report key data this week
NEW YORK, July 29 (Reuters) - Prices of U.S. Treasuries slipped on Monday as corporate issuers launched deals to try to lock in rates ahead of this week's Federal Reserve policy statement and key U.S. employment report, traders said. Dan Heckman, senior fixed income strategist at U.S. Bank Wealth Management in Kansas, Missouri, said the market would likely trade "in a pretty tight range" unless Friday's employment report "is incredibly weak" and persuades market participants that the Fed won't begin to cut back on its bond purchases until December." Currently, many participants believe the U.S. central bank will begin to trim the bond purchases that partly comprise its quantitative easing policy in September. Energy names dominated the U.S. high-grade primary market on Monday in a week estimated to see $15 billion to $20 billion in corporate issuance. Most of the deals are expected to get done before the Fed's policy announcement on Wednesday and the jobs number on Friday, said IFR, a Thomson Reuters company. On Monday, the Fed bought $3.142 billion in Treasuries maturing February 2021 through November 2022. Heckman said he, himself, already leaned toward December for the timing of cuts in the Fed's bond purchases. "To tip the scales to September, the Fed would need to see a pretty strong employment report this Friday," he said. "The key will be this Friday." Economists polled by Reuters estimated U.S. payrolls added 185,000 jobs in July and that the unemployment rate slipped to 7.5 percent from 7.6 percent in June. Some large sellers of bunds in London, real money selling five-year Treasuries, and the perception the Fed will taper some of the bond purchases that comprise its quantitative easing policy weighed on Treasury prices, said Thomas di Galoma, one of the heads of bond trading at ED&F Man Capital Markets. "Also, there is a ton of chatter that the non-farm U.S. payrolls data due on Friday will be more robust than previously thought due to auto worker hiring," he added. Benchmark 10-year notes slipped 7/32 in price, their yields edging up to 2.60 percent from 2.57 percent late on Friday. Ten-year yields have ranged from around 2.43 percent to 2.63 percent in the last two weeks, after hitting two year highs of 2.76 percent on July 8. Traders said the Fed's statement, due on Wednesday at the conclusion of a two-day policy meeting, will be analyzed for hints as to when the U.S. central bank is likely to adjust its bond purchase program. But the spotlight will be on economic data as well, because the Fed has said its policy depends on what the data reveal about how the economy is faring. Consumer confidence and home price data are due on Tuesday, but Wednesday brings the July ADP private sector employment report and the advance estimate of Q2 GDP, along with GDP benchmark revisions. The Institute for Supply Management (ISM) manufacturing and non-manufacturing indexes are due Thursday and Friday, respectively. And the most influential report, the Labor Department monthly employment figures, is due on Friday. Data on pending U.S. home sales released on Monday showed they slipped slightly in June. Investors are watching the housing sector closely to see whether its recovery will be strong enough to fuel economic growth, Heckman said. EYE ON THE FED Most economists and investors expect the Fed to reduce the size of the program in September, but some believe growth will be subdued enough to forestall cutbacks until later in the year. The Fed's meeting starts Tuesday. A statement will be released at the conclusion of the meeting on Wednesday. The Merrill Lynch MOVE index, which estimates future volatility of long-term bond yields, slipped to 81.6 from 82.6 on Friday. The index has fallen from 118 on July 5. The Treasury's quarterly refunding announcement for on Wednesday will also be a focus for the market. Some analysts expect the U.S. government to start cutting the size of its coupon-bearing debt sales for the first time since September 2010, as the falling deficit reduces its funding needs. Any cuts are seen likely to start in the shortest maturities, such as two-year and three-year notes, before moving to longer-dated debt. Investors will also be watching for any new information about the Treasury's plan to introduce floating-rate notes, which are expected as soon as the fourth quarter of the year.