TREASURIES OUTLOOK-U.S. bonds slip on stock gains, corporate supply

* Investors hope BOJ to take more action after weak domestic

data

* All-time highs on Wall Street reduce U.S (Other OTC: UBGXF - news) . bond demand

* U.S. high-grade issuance seen at $10 bln-$15 bln this week

-IFR

(Repeat to additional subscribers)

By Richard Leong

NEW YORK, Aug 15 (Reuters) - U.S. Treasury prices fell on

Monday, with benchmark yields rising from near two-week lows as

hopes for more central bank stimulus overseas stoked demand for

stocks and other risky assets, reducing demand for low-yielding

government debt.

Hedging linked to this week's corporate bond supply also

spurred selling in Treasuries, analysts said.

Oil prices, which hit five-week highs on hopes producers

would act to stabilize the market, together with bets the Bank

of Japan may provide more measures to help its economy in the

wake of disappointing domestic growth and inflation data,

propelled Wall Street's three major indexes to all-time highs.

"I am looking at the Treasuries market to be bouncing around

here and trade off equities," said Brian Rehling, global co-head

of fixed income strategy at Wells Fargo Investment Institute in

St. Louis, Missouri.

On light trading volume, benchmark 10-year Treasury notes

were down 11/32 in price with a yield of 1.552

percent, up 4 basis points from late on Friday.

The 10-year yield touched a near two-week low on Friday

following surprisingly weak data on July U.S. retail sales. The

sales figures undercut optimism about economic growth in the

third quarter stemming from an upbeat July jobs report a week

earlier.

"That put another data point for the Fed to stay on hold,"

Rehling said. "We are going to continue to get these mixed

signals."

The New York Federal Reserve said on Monday its "Empire (Stockholm: EMP-B.ST - news) "

regional business gauge unexpectedly fell into contraction

territory in August, while the National Association of Home

Builders Association said its measure of members' view on the

housing market edged up, as expected, in August. But it revised

down its July reading.

These figures supported the view that third-quarter U.S.

gross domestic product may not be as strong as previously

thought and the Fed would leave rates alone at its September

policy meeting.

Interest rates futures implied traders saw a 12 percent

chance of a Fed rate hike next month, up from Friday's 9 percent

probability, according to CME Group (Kuala Lumpur: 7018.KL - news) 's FedWatch program.

Investors await a speech from Fed Chair Janet Yellen on Aug.

26 at the central bank's annual conference in Jackson Hole,

Wyoming for possible clues on the timing on a rate hike.

On the supply front, companies sold $1.825 billion in

investment-grade bonds on Monday, out of the $10 billion to $15

billion expected for sale this week, according to IFR, a unit of

Thomson Reuters (Dusseldorf: TOC.DU - news) .

August 15 Monday 3:35PM New York / 1935 GMT

Price

US T BONDS SEP6 171-25/32 -1-6/32

10YR TNotes SEP6 132-64/256 -0-72/25

6

Price Current Net

Yield % Change

(bps)

Three-month bills 0.2875 0.2925 0.010

Six-month bills 0.4375 0.4445 0.016

Two-year note 100-10/256 0.7298 0.020

Three-year note 99-184/256 0.8452 0.021

Five-year note 99-248/256 1.1315 0.031

Seven-year note 99-8/256 1.3966 0.036

10-year note 99-132/256 1.5525 0.038

30-year bond 99-128/256 2.2731 0.038

DOLLAR SWAP SPREADS

Last (bps) Net (LSE: 0LN0.L - news)

Change

(bps)

U.S. 2-year dollar swap 22.75 -2.25

spread

U.S. 3-year dollar swap 17.00 -1.75

spread

U.S. 5-year dollar swap 0.75 -1.50

spread

U.S. 10-year dollar swap -12.75 -1.00

spread

U.S. 30-year dollar swap -50.50 -0.75

spread

(Reporting by Richard Leong; Editing by Dan Grebler and Tom

Brown)