TREASURIES-U.S. bond yields firm in light, pre-Christmas trading

* U.S. yield curve set for biggest weekly steepening since July

* New home sales, consumer spending data suggest solid U.S. growth

* U.S. bond market to shut at 2 p.m. (1900 GMT), to close Monday

(Updates market action, adds quote) NEW YORK, Dec 22 (Reuters) - U.S. Treasury yields rose modestly on Friday with benchmark yields staying below their nine-month peak as investors moved to the sidelines before Christmas. The yield curve, while mildly flatter on the day, was on track for its largest weekly steepening since July after the U.S. Congress approved the most sweeping change in the U.S. tax code in 30 years on Wednesday. The tax plan has stoked expectations of greater business investments and a $1.5 trillion increase to the national debt in the next decade. The U.S. bond market will close early at 2 p.m. (1900 GMT) on Friday and stay shut on Monday, Christmas Day. Many European markets will remain closed next Tuesday. "Too many people are out. We are not going to have a lot of people putting on big positions at year-end," said Ed Al-Hussainy, senior interest rate and currency analyst at Columbia Threadneedle in Minneapolis. Traders brushed off Friday's spate of domestic data on durable goods orders, personal spending, new home sales and consumer sentiment. Collectively, these latest figures pointed to a solid pace of economic expansion in the fourth quarter even before corporate and individual tax cuts go into effect in 2018.

At 10:30 a.m. (1530 GMT) the 10-year Treasury yield was 2.488 percent, up half a basis point on the day. It reached a nine-month high of 2.504 percent on Thursday. Two-year yield reached a nine-year high of 1.895 percent before pulling back to 1.891 percent, up 1 basis points from late Thursday. Earlier Friday, the five-year yield touched 2.254 percent, which was the highest since April 2011, Reuters data showed. The five-year to 30-year part of the yield curve was marginally flatter at 59.0 basis points. It hit 51.9 basis points on Monday which was the flattest level since October 2007, Reuters and Tradeweb data showed. On the week, the gap between five-year and 30-year yields grew by nearly 6 basis points, which would be the biggest such move since mid-July. Dec. 22 Friday 10:31 A.M. New York / 1531 GMT Price

US T BONDS MAR8 150-30/32 -0-8/32 10YR TNotes MAR8 123-124/256 -0-8/256 Price Current Net Yield % Change


Three-month bills 1.325 1.3477 -0.005 Six-month bills 1.5025 1.5347 -0.005 Two-year note 99-188/256 1.8906 0.013 Three-year note 99-162/256 2.0029 0.006 Five-year note 98-214/256 2.2507 0.006 Seven-year note 98-68/256 2.3981 0.003 10-year note 97-236/256 2.4883 0.005 30-year bond 98-28/256 2.8442 0.010 YIELD CURVE Last (bps) Net

Change (bps)

10-year vs 2-year yield 59.50 -0.50 30-year vs 5-year yield 59.20 -0.30


Last (bps) Net

Change (bps)

U.S. 2-year dollar swap 20.25 0.00


U.S. 3-year dollar swap 18.75 0.25


U.S. 5-year dollar swap 4.25 -0.25


U.S. 10-year dollar swap -2.50 -0.75


U.S. 30-year dollar swap -22.00 -1.00


(Reporting by Richard Leong; editing by Grant McCool)