TREASURIES-U.S. bond yields retreat as market selloff fades

* U.S. yield curve flattens a tad after sharp steepening

* GDP, jobless claims data suggest steady U.S. growth

* U.S. to sell $14 bln 5-year TIPS at 1 p.m.

* U.S. bond market to close early on Friday before Christmas

(Updates market action, adds quote) NEW YORK, Dec 21 (Reuters) - U.S. Treasury yields fell on Thursday with 10-year yields scaling back from a nine-month peak as bargain-minded investors emerged, providing a respite from a sharp three-day bond market selloff tied to a sweeping U.S. tax bill. The most dramatic overhaul of the U.S. tax code in 30 years, which Congress approved on Wednesday, had stoked a bond market selloff the previous three days as traders expected the proposed tax cuts to corporations and wealthy individuals would boost economic growth and pile on at least $1 trillion to the national debt in 10 years. That view of faster growth and higher federal debt load hit longer-dated bonds especially hard, steepening the yield curve that had reached its flattest level in a decade this week. "The downward pressure on long-end yields has been taken off with the passage of the tax bill," said Larry Milstein, head of government and agency trading at R.W. Pressprich & Co in New York. "People are nibbling a bit here," he said of Thursday's mild bargain hunting. At 9:56 a.m. (1456 GMT) the 10-year Treasury yield was 2.493 percent, down marginally from late on Wednesday after touching 2.504 percent earlier on Thursday. The five-year to 30-year part of the yield curve flattened 2 basis points to 61.9 basis points. It hit 51.9 basis points on Monday which was the flattest level since October 2007, Reuters and Tradeweb data showed. With the major U.S. tax legislation likely enacted into law as soon as President Donald Trump signs it, investors are left to interpret a batch of economic data and determine the strength of business and consumer activities before the tax changes go into effect, analysts said. On Thursday, the government said the U.S. economy in the third quarter grew at a 3.2 percent annualized pace, its briskest in more than two years. The figure was slower than a prior estimate of 3.3 percent. Domestic weekly jobless claims rose to 245,000 last week but still suggested a firm labor market. On the supply front, the government will sell $14 billion of five-year Treasury Inflation Protected Securities at 1 p.m. (1800 GMT). Trading volume has been relatively light this week as some traders and investors already left for the Christmas holiday. The U.S. bond market will close early at 2 p.m. (1900 GMT) on Friday and stay shut on Monday. Many European markets will remain closed next Tuesday. December 21 Thursday 9:57AM New York / 1457 GMT Price

US T BONDS MAR8 150-22/32 0-4/32 10YR TNotes MAR8 123-120/256 0-4/256 Price Current Net Yield % Change


Three-month bills 1.3575 1.381 -0.003 Six-month bills 1.49 1.5221 0.002 Two-year note 99-198/256 1.8693 0.008 Three-year note 99-170/256 1.9916 0.003 Five-year note 98-222/256 2.2434 0.001 Seven-year note 98-64/256 2.4002 0.000 10-year note 97-224/256 2.4935 -0.003 30-year bond 97-180/256 2.8648 -0.010 YIELD CURVE Last (bps) Net

Change (bps)

10-year vs 2-year yield 62.30 -1.35 30-year vs 5-year yield 62.10 -1.80


Last (bps) Net

Change (bps)

U.S. 2-year dollar swap 21.25 0.50


U.S. 3-year dollar swap 19.00 1.25


U.S. 5-year dollar swap 4.75 0.25


U.S. 10-year dollar swap -1.75 0.75


U.S. 30-year dollar swap -21.50 1.00


(Reporting by Richard Leong; Editing by Susan Thomas and Phil Berlowitz)