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TREASURIES-U.S. yields edge up as economic data offsets trade jitters

Richard Leong

* Philly Fed, jobless claims data pare economic worries

* Trade tensions, weak results spur early bids for bonds

* U.S. to sell $13 bln 10-year TIPS at 1 p.m. (1800 GMT)

(Updates market action, adds quote) NEW YORK, Jan 17 (Reuters) - U.S. Treasury yields ticked up on Thursday as better-than-expected economic data offset trade tensions between China and the United States, holding down safe-haven bids for U.S. government debt. This week's offering of corporate bonds put some upward pressure on Treasury yields, as dealers sold Treasuries to lock in borrowing costs on debt they underwrote and investors reduced their U.S. government debt holdings to make room for the corporate supply, traders and analysts said. On the other hand, the historically long government shutdown and uncertainty about Brexit have kept a lid on Treasury yields, holding them in a tight trading range this week. "A lot of the risk events this week haven't done a lot to the various parts of the yield curve," said Mike Lorizio, head of Treasury and agency trading at Manulife Asset Management in Boston. At 10:37 a.m. (1537 GMT), the yield on benchmark 10-year Treasury notes was 2.734 percent, up 0.5 basis point from late on Wednesday. Bond yields were lower earlier along with weaker U.S. stock index futures after U.S. lawmakers introduced bills on Wednesday that would ban the sale of U.S. computer chips or other components to Chinese firms that violate U.S. sanctions or export control laws. This legislative move reduced optimism about Washington and Beijing to resolve their trade issues. The initial safe-haven demand for Treasuries faded following an unexpected fall in domestic first-time filings for unemployment benefits last week and a stronger-than-forecast increase in early January on a measure of Mid-Atlantic business activity from the Philadelphia Federal Reserve. The 10-year Treasury yield hit a near one-year low of 2.543 percent almost two weeks ago on concerns about weakening economic growth and bets the U.S. central bank may not raise interest rates in 2019. On the supply front, companies have raised $21.4 billion through investment-grade debt sales this week, according to IFR.

The Treasury Department will sell $13 billion in 10-year Treasury Inflation Protected Securities at 1 p.m. (1800 GMT). January 17 Thursday 10:38 AM New York / 1538 GMT Price

US T BONDS MAR9 145-7/32 1/3210YR TNotes MAR9 121-164/256 -3/32Price Current NetYield % Change

(bps)

Three-month bills 2.365 2.4121 -0.008Six-month bills 2.4375 2.502 0.002Two-year note 99-227/256 2.5596 0.013Three-year note 99-224/256 2.5436 0.014Five-year note 100-80/256 2.5572 0.012Seven-year note 99-244/256 2.6323 0.01010-year note 103-88/256 2.7343 0.00530-year bond 105-240/256 3.0695 -0.006YIELD CURVE Last (bps) Net

Change (bps)

10-year vs 2-year yield 17.20 -0.8030-year vs 5-year yield 51.20 -2.10

DOLLAR SWAP SPREADS

Last (bps) Net

Change (bps)

U.S. 2-year dollar swap 16.50 0.00

spread

U.S. 3-year dollar swap 12.50 0.00

spread

U.S. 5-year dollar swap 9.50 0.50

spread

U.S. 10-year dollar swap 3.50 0.50

spread

U.S. 30-year dollar swap -20.00 0.25

spread

(Reporting by Richard Leong)