REFILE-TREASURIES-Budget wrangling keeps U.S. yields near 2-month lows
LONDON Nov 16 (Reuters) - U.S. debt yields steadied near two-month lows on Friday before key budget talks aimed at preventing large-scale automatic fiscal tightening that could push the world's largest economy back into recession.
* The so-called "fiscal cliff" that the United States is trying to avoid amounts for about $600 billon of tax increases and spending cuts that would automatically come into force next year if the Congress fails to agree on less extreme measures.
* Newly re-elected President Barack Obama and congressional leaders were due to hold budget talks on Friday. Democrat Obama advocates raising taxes for the wealthy Americans, while the Republicans oppose any tax hikes.
* "We need to see signs that it's going one way or another," Rabobank strategist Philip Marey said. "Just after the elections they (U.S. politicians) were very polite to each other. A couple of days later they'd already drawn their lines in the sand and that's a worry."
* "There's still a general perception that they'll be realistic and reach a deal, but if you listen to political commentators you may think financial markets are a bit optimistic," Marey added.
* Benchmark U.S. T-note yields were 0.3 basis points lower at 1.591 percent, not far from a two-month low of 1.572 percent hit earlier this week. T-note futures were flat at 134-1/32.
* Investors are also watching developments in Greece. Its international lenders are squabbling over how to fix its long-term debt sustainability and that is delaying a new aid payment Athens needs to stay afloat.
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