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TREASURIES OUTLOOK-Bonds hold gains as Powell nominated to be Fed chair

* Powell's nomination was already priced in by market

* Republican tax plan seen facing challenges

* Friday's jobs report for October in focus

NEW YORK, Nov 2 (Reuters) - U.S. Treasuries were little changed on Thursday after President Donald Trump nominated Federal Reserve Governor Jerome Powell to head the Federal Reserve, as expected, and prices ended the day higher. Powell, who already sits on the U.S. central bank's board, is seen as someone who will stick with the monetary policy stance favored by current Chair Janet Yellen, whose term expires in early February. The market since last week priced in Powell to be the next Fed chair, and I think its going to be more or less status quo going forward, said Justin Lederer, an interest rate strategist at Cantor Fitzgerald in New York.

Benchmark 10-year notes gained 7/32 in price to

yield 2.35 percent, down from 2.38 percent on Wednesday. The yields are down from 2.48 percent last Friday. The Treasury yield curve also continued to flatten, a day after the Treasury Department said it would keep auction sizes steady in the coming months, despite the Fed's plan to reduce its bond holdings. The Treasury Borrowing Advisory Committee, which advises the government on funding strategy, said Treasury bills and two-, three- and five-year notes could be appropriate maturities for increased issuance. Some investors had expected that Treasury might focus on increasing longer-dated debt maturities. The yield curve between five-year notes and 30-year bonds flattened to as low as 82.1 basis points, the lowest level since late 2007. The gap between two-year and 10-year yields briefly dropped to 72.8 basis points, when Powell appeared with Trump as the president began to announce his choice for the Fed. It then widened back to 73.5 basis points. Also on Thursday, U.S. House of Representatives Republicans unveiled long-delayed legislation to deliver deep tax cuts that President Donald Trump has promised, though the measure is seen facing opposition. "It's going to have a hard time passing in its current form," said Aaron Kohli, an interest rate strategist with BMO Capital Markets in New York. "It's not clear how it's going to be paid for." Thursday's bond rally was in step with lower UK yields after the Bank of England hiked interest rates for the first time in a decade and signaled it would adopt a gradual approach to increase rates further. Investors are next focused on Fridays jobs report for October.

(Reporting by Karen Brettell and Richard Leong; Editing by Leslie Adler)