TREASURIES-Yields rise on fresh hopes of trade deal

Karen Brettell

* Kudlow talks up trade talks

* Retail sales data disappoints

NEW YORK, Nov 15 (Reuters) - U.S. Treasury yields rose on Friday as fresh hopes that the United States and China will reach a deal to de-escalate their trade war boosted risk appetite, and reduced demand for U.S. government bonds. The United States and China are getting close to a trade agreement, White House economic adviser Larry Kudlow said on Thursday, citing what he called very constructive talks with Beijing about ending a 16-month trade war. The comments come after several media reports indicated that negotiators are struggling to reach a deal. The Financial Times reported on Thursday that the countries are struggling to agree on issues including intellectual property, agricultural purchases and tariffs. Overnight, there were some positive trade headlines so you had rates under a little bit of pressure, giving back some of the gains this week, said Justin Lederer, an interest rate strategist at Cantor Fitzgerald in New York.

Benchmark 10-year notes were last down 5/32 in

price to yield 1.833%, up from 1.815% late Thursday. Bonds prices have gained this week as optimism over a trade deal ebbed, retracing some of last week's dramatic selloff.

Ten-year note yields rose to 1.973% on November

7, which was the highest since August 1, and have climbed from 1.670% on November 1. Yields gave back some price losses on Friday after data showed that U.S. retail sales rebounded in October, but consumers cut back on purchases of big-ticket household items and clothing, which could temper expectations for a strong holiday shopping season. The data was all in all a little weaker than expected, Lederer said.

(Editing by Nick Zieminski )