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TREASURIES-Longer-dated prices rise on muted inflation view

(Updates market action, adds details on PPI data)

NEW YORK, Oct 12 (Reuters) - Longer-dated U.S. Treasuries prices rose on Friday after U.S. producer price data signaled the underlying domestic inflation trend remained muted due to sluggish demand, making long-dated debt attractive to investors.

The government's producer price index rose 1.1 percent in September, largely due to a 9.8 percent jump in gasoline prices. However, bond traders focused on the index's core, which excluded volatile energy and food prices, and was unchanged on the month.

Benchmark 10-year Treasury notes

rose 2/32 in price, yielding 1.659 percent, 1 basis point lower than Thursday's close.

The 30-year bond

was up 11/32 in price, rebounding from an earlier 18/32 decline in overseas trading. The 30-year yield was last 2.830 percent, compared with Thursday's close at 2.848 percent.

(Reporting by Richard Leong; Editing by Leslie Adler)

((richard.leong@thomsonreuters.com)(+1 646 303 6313)(Reuters Messaging: richard.leong.thomsonreuters.com@thomsonreuters.net))

((-------MARKET SNAPSHOT AT 9:01 a.m. EDT (1301 GMT)------- Dec T-Bond 149-20/32 (+12/32) Dec 10-Year note 133-11/32 (+03/32) Change vs Current Nyk yield Three-month bills 0.1 (+0.00) 0.102 Six-month bills 0.1475 (+0.00) 0.150 Two-year note 99-31/32 (+) 0.266 Five-year note 99-27/32 (+) 0.659 10-year note 99-22/32 (+03/32) 1.660 30-year bond 98-13/32 (+12/32) 2.829 DOLLAR SWAP SPREADS LAST Change U.S. 2-year dollar swap spread 10.75 (-1.25) U.S. 3-year dollar swap spread 10.50 (-0.50) U.S. 5-year dollar swap spread 12.50 (-0.25) U.S. 10-year dollar swap spread 4.50 (+0.25)

U.S. 30-year dollar swap spread -23.25 (+0.25)))

Keywords: MARKETS USA BONDS/