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TREASURIES-U.S. yields slip as investors square up ahead of year-end

taking an outside bet."

NEW YORK, Dec 23 (Reuters) - U.S. Treasury yields were little changed to slightly lower on Monday in generally thin trading, as market participants squared up positions going into the year-end. A weaker-than-expected U.S. durable goods report for November pushed yields a little lower early in the session. The details of the report, though, were not as soft as the headline suggested, analysts said, lifting yields off their lows. U.S. orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, edged up 0.1% last month, with the decline in orders for machinery offsetting the surge in demand for electrical equipment, appliances, and components. "When you go through parts of the report, you are less discouraged because all of it is defense orders, which are quite volatile," said Stan Shipley, fixed-income strategist at Evercore ISI in New York. The so-called core capital goods orders rose by an unrevised 1.1% in October. Economists polled by Reuters had forecast core capital goods orders gaining 0.2% in November. Overall, trading is expected to slow in the holiday-shortened week, and ahead of the year-end. "It's going to be thin volume," said Shipley. "People would want to lock in their positions over the next week or two. You really don't want to destroy the good returns you have this year So far this year, the ICE Bank of America Merrill Lynch U.S. Treasury Index, a gauge of the Treasury market's performance, was up nearly 7%. The yield on the U.S. 10-year note dipped to 1.911% from 1.917% late on Friday, while U.S. 30-year bond yields slipped to 2.337% from 2.346% on Friday. Yields edged higher after data showed U.S. new home sales rebounded 1.3% to a seasonally adjusted annual rate of 719,000 units last month, lifted by gains in activity in the Northeast and West regions. October's sales pace was revised down to 710,000 units from the previously reported 733,000 units. On the short end of the curve, U.S. two-year yields were up at 1.639%, from Friday's 1.629%. The yield curve flattened for a second straight session on Monday, with the spread between the two-year and 10-year note yields falling to 27 basis points. Ahead of the year-end, market participants sought to unwind steepening trades put on the last two weeks as the U.S.-China trade concerns eased with a preliminary deal on the horizon.

December 23 Monday 10:23 AM New York/1523 GMT

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(Reporting by Gertrude Chavez-Dreyfuss; Editing by Dan Grebler)