TREASURIES-Treasuries pause in Europe in run-up to holiday
LONDON Nov 21 (Reuters) - U.S. Treasuries paused in Europe on Wednesday, stabilising after a sharp sell-off this week as market players squared positions ahead of the Thanksgiving weekend.
* Treasury yields have come under pressure this week on optimism that U.S. lawmakers in Washington will strike a deal to avoid the "fiscal cliff" of spending cuts and tax hikes due to take effect early next year.
* "The markets are maybe getting a little bit ahead of themselves by pricing in a fiscal cliff deal, the question is just how much of a drag on growth any deal they agree is going to have," a trader said. "What we're seeing this morning is some position squaring into the end of the week with Thanksgiving tomorrow," he added.
* Benchmark 10-year Treasury yields were a basis point lower at 1.66 percent, having risen around 8 basis points this week, with T-Note futures unchanged at 133-39/64.
* Federal Reserve Chairman Ben Bernanke said 2013 would be a "very good year" for the U.S. economy if politicians reach a quick agreement but some analysts were sceptical any compromise would go far enough.
"It seems the uncertainty associated with the range of fiscal outcomes during the tax cliff negotiations and beyond is underappreciated by investors," Barclays strategists said in a note. "It seems unlikely the negotiations will produce a comprehensive solution that will significantly reduce the macroeconomic risks related to fiscal and monetary policy for 2013."
* With U.S. markets closed on Thursday, the week's data releases come thick and fast on Wednesday with jobless claims data to be issued a day early.