TREASURIES-U.S. yields dip in quiet trading ahead of bond auctions

* Focus on U.S. Treasury auctions this week

* Markets pricing just 46 pct chance of rate hike in December

(Adds comment, updates prices) NEW YORK, Aug 7 (Reuters) - U.S. Treasury yields slipped on Monday after a stronger-than-expected U.S. non-farm payrolls report the previous session, with no major market drivers ahead of a slew of government bond and corporate supply this week. Yields see-sawed between gains and losses in New York's morning session before weakening on a sustained basis in the afternoon, with traders noting thin two-way flows. "It has been just lower yields across the board globally," said Bruno Braizinha, interest rates strategist, at Societe Generale in New York. "Treasuries are converging into tighter and tighter ranges and this is what the market has been expecting." Friday's strong U.S. non-farm payrolls failed to increase expectations for a rate hike in December, supporting Monday's rangebound session. On Monday, rates futures priced in just a 45 percent chance the Federal Reserve would raise rates by December, down from 54 percent a month ago, according to the CME's FedWatch. The rate hike is only fully factored in by mid-2018, CME data showed. "I think the Fed is more focused on balance sheet reduction more than anything else, on getting the process started, likely in September," Braizinha said. In the absence of major U.S. data, the market focused on a heavy schedule of government and corporate bond issues this week. The government is selling $62 billion in coupons in its August refunding, beginning Tuesday with the $24 billion three-year note, followed by $23 billion in 10-year notes, and $15 billion in 30-year bonds. Overall, traders said Treasuries on the auction block needed to weaken in price more in order to attract buyers. Ahead of a Treasury sale, traders tend to sell the bond so they can buy them at a lower price at the auction, a practice known as "concession." There are also corporate bond issues between $25 billion and $30 billion, Action Economics said. Also on Monday, the U.S. yield curve steepened, with the spread between the five-year and 30-year rising to 102.5 basis

points .

In general, a steeper yield curve suggests investors may finally be pricing some inflation. Investors though for some time have lamented the lack of inflation, which has resulted in a flatter yield curve for most of 2017. Traders said Friday's steeper yield curve after a robust payrolls report was more an anomaly than the trend. In late trading, U.S. 10-year yields slipped to 2.258

percent , from 2.269 percent late Friday. U.S. 30-year bonds yielded 2.835 percent , down

from 2.844 percent the previous day.

U.S. two-year yields were at 1.354 percent , from

Friday's 1.359 percent.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Andrew Hay)