TREASURIES-U.S. yields fall as Wall Street losses grow

* Stock market losses feed safe-haven bids for Treasuries

* U.S. to sell $29 bln 7-year notes, $15 bln 2-year FRNs

* Treasuries set to earn biggest monthly return since August

* U.S. Q4 GDP revised up to 1.9 pct, beating forecasts

(New throughout, updates yields, market activity and comments) NEW YORK, March 28 (Reuters) - U.S. Treasury yields declined on Wednesday as quarter-end buying for portfolio rebalancing and safe-haven demand due to growing stock market losses pushed the benchmark 10-year yield to seven-week lows. These factors overshadowed this week's record high $294 billion in government debt, to be completed Wednesday with sales of $15 billion in two-year floating-rate notes and $29 billion seven-year notes. The $14.6 trillion bond sector, which investors now favor overs stocks, has produced a 0.68 percent total return in March for its strongest month since last August, according to an index compiled by Bloomberg and Barclays. "We are seeing a strong bid this week, reflecting a flight-to-quality demand," said Bill Merz, head of fixed income research at U.S. Bank Wealth Management in Minneapolis. "It's been exacerbated by short-covering." Traders have exited short positions or bets on bond yields to rise this week as U.S. stock prices fell on worries about a trade war between the United States and China and a scandal over political consultants accessing Facebook user data.

Speculators had heavy net short positions in Treasury futures with near record net shorts in five-year T-notes, according to data from the Commodity Futures Trading Commission released last Friday. At 11:19 a.m. (1519 GMT), the yield on 10-year Treasury notes was down 3.5 basis points to 2.753 percent. It hit a seven-week low of 2.743 percent earlier. The yield on five-year Treasury notes reached a six-week low of 2.540 percent earlier Wednesday. It was last down 2.8 basis points at 2.564 percent. Wall Street's three major indexes were down for a second day, on track for their biggest monthly loss since January 2016.

On the data front, the government revised up its reading on domestic economic growth in the fourth quarter to 1.9 percent from 2.5 percent. Analysts polled by Reuters had forecast an adjustment up to 2.7 percent. March 28 Wednesday 11:00AM New York / 1500 GMT Price

US T BONDS JUN8 146-6/32 0-18/32 10YR TNotes JUN8 121-44/256 0-68/256 Price Current Net Yield % Change


Three-month bills 1.7175 1.7489 -0.026 Six-month bills 1.8875 1.9322 -0.005 Two-year note 99-250/256 2.262 -0.016 Three-year note 100 2.3748 -0.022 Five-year note 99-188/256 2.557 -0.035 Seven-year note 100-116/256 2.6777 -0.034 10-year note 100 2.7498 -0.038 30-year bond 99-224/256 3.0063 -0.025


Last (bps) Net

Change (bps)

U.S. 2-year dollar swap 28.50 1.00


U.S. 3-year dollar swap 25.00 0.75


U.S. 5-year dollar swap 13.00 0.00


U.S. 10-year dollar swap 2.00 0.50


U.S. 30-year dollar swap -17.50 -0.25


(Reporting by Richard Leong; Editing by David Gregorio)