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TREASURIES-Turkey-Russia tension lifts U.S. bond prices
* Turkey downing Russian warplane spurs safety bids for bonds
* U.S (Other OTC: UBGXF - news) . 5-year note sale fetches mediocre demand
* U.S. GDP, home price data support rate-hike view in December (New (KOSDAQ: 160550.KQ - news) throughout, updates prices and market activity, adds analyst comment)
By Richard Leong
NEW YORK, Nov 24 (Reuters) - U.S. Treasuries prices rose on Tuesday, with the 30-year yield hovering near 3 percent after Turkey's downing of a Russian warplane stoked safe-haven demand for low-risk government debt.
The bond market's gains were limited by encouraging domestic data that supported the view the U.S. Federal Reserve will raise interest rates in December.
Bond prices retreated from early highs as U.S. oil futures jumped nearly 3 percent on worries that an escalation in tensions between Turkey and Russia would disrupt crude exports from the Middle East.
Analysts and traders expect the tension between the two nations would remain contained for now.
"It (Other OTC: ITGL - news) 's more of a one-off situation. I don't think either side wants to expand this," said Larry Milstein, head of U.S. government and agency trading at R.W. Pressprich & Co. in New York.
Tuesday's safety bids for Treasuries did not add demand at a $35 billion auction of five-year government debt which fetched the highest yield since June.
"You have a Fed that's ready to go. The market is in a wait-and-hold pattern," said Gene Tannuzzo, senior portfolio manager at Columbia Threadneedle Investments in Minneapolis.
The Treasury also sold $13 billion in two-year floating-rate notes and $50 billion in one-month bills on Tuesday.
The Treasury will complete this week's auctions with a $29 billion sale of seven-year notes on Wednesday.
The U.S. bond market will close on Thursday for the U.S. Thanksgiving holiday and will shut early at 2 p.m. (1900 GMT) on Friday.
In afternoon trading, benchmark 10-year Treasuries notes were up 3/32 in price to yield 2.239 percent, down 1 basis point from late on Monday.
Ten-year note prices were up as much 12/32 prior to release of the government's second reading of gross domestic product in the third quarter and S&P/Case-Shiller's report on U.S. home prices in September.
The Commerce Department said U.S. GDP grew at a 2.1 percent annual pace in the quarter, faster than the 1.5 percent rate it reported last month.
S&P/Case-Shiller's index of 20 metropolitan areas gained 5.5 percent in September on a year-over-year basis, stronger than 5.1 percent forecast increase among economists polled by Reuters.
The encouraging data was undercut by a surprise drop in the Conference Board's index on U.S. consumer confidence in November to its lowest level since September 2014. (Reporting by Richard Leong; Editing by Dan Grebler and David Gregorio)
