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TREASURIES-Yields slip, along with U.S. stocks, before inflation data

By Gertrude Chavez-Dreyfuss

NEW YORK, Feb 13 (Reuters) - U.S. long-dated Treasury yields

slipped on Tuesday in quiet trading, tracking the decline in

stocks ahead of a crucial U.S. inflation report on Wednesday

that could shed more light on the pace of future interest rate

increases by the Federal Reserve.

"We're seeing stocks trading lower and so perhaps the

Treasury market is a little bit on edge," said Gennadiy

Goldberg, interest rates strategist, at TD Securities in New (KOSDAQ: 160550.KQ - news)

York.

"I think overall the market is waiting for tomorrow's CPI

(consumer price index) report and it's unwilling to put in

strong positions ahead of that report. People want to see if it

would confirm the recent trend of strong inflation and strong

growth."

Economists expect a 0.3 percent rise in inflation in January

and a core figure of 0.2 percent, according to a Reuters poll.

Investors started to worry more about inflation after a

prolonged period of stagnant price gains, spooked by robust wage

increases of 2.9 percent in the January U.S. jobs report, and

its impact on borrowing costs.

That caused sharp volatility in the stock market.

U.S. 10-year yields, which move inversely to prices, have

risen about 43 basis points so far this year. U.S. 30-year

yields are on similar path, climbing 38 basis points in 2018.

Part of the run-up, however, was not all due to events in

the United States, analysts said.

TD's Goldberg said global central banks such as the European

Central Bank and Bank of England have started to normalize their

monetary policies, pushing yields higher. That has spilled over

to the U.S. Treasury market.

"There is a global re-pricing of the quantitative easing

trade," Goldberg said.

In late-morning trading, U.S. 10-year yields

fell to 2.842 percent from 2.855 percent late on Monday. U.S.

10-year yields hit 2.902 percent on Monday, the highest since

January 2014.

U.S. 30-year bond yields fell to 3.129 percent,

from Monday's 3.136 percent. The yield on the maturity touched

an 11-month peak of 3.139 percent on Monday.

February 13 Tuesday 10:48 AM EST / 1548 GMT

Price

US T BONDS MAR8 144-12/32 -0-1/32

10YR TNotes MAR8 120-244/256 0-16/256

Price Current Net

Yield % Change

(bps)

Three-month bills 1.58 1.6084 0.007

Six-month bills 1.7625 1.8031 -0.016

Two-year note 99-206/256 2.102 0.025

Three-year note 99-208/256 2.3151 0.011

Five-year note 99-46/256 2.552 -0.002

Seven-year note 98-100/256 2.7556 -0.006

10-year note 99-44/256 2.8457 -0.009

30-year bond 97-116/256 3.1315 -0.004

DOLLAR SWAP SPREADS

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

Change

(bps)

U.S. 2-year dollar swap 26.00 -1.75

spread

U.S. 3-year dollar swap 18.00 -0.50

spread

U.S. 5-year dollar swap 9.50 0.00

spread

U.S. 10-year dollar swap 1.00 0.00

spread

U.S. 30-year dollar swap -17.50 -0.50

spread

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Jeffrey

Benkoe)