TREASURIES-Prices hold at higher levels after US factory data

NEW YORK, Sept 20 (Reuters) - U.S. Treasuries prices held steady at higher levels early Thursday after a private report on U.S. manufacturing matched market expectations, suggesting the sector grew at a modest pace in September.

Markit said its U.S. purchasing managers index came in at 51.5 in September, unchanged from August. A reading above 50 means the sector is expanding.

Benchmark U.S. 10-year Treasury notes last traded up 10/32 in price at 98-31/32, yielding 1.739 percent, down 3.5 basis points from Wednesday's close.