TREASURIES-U.S. bond prices slip in somnolent trading
* Traders refrain from making bets on U.S. fiscal worries * Trading volume plummets before Christmas * U.S. bond market closes early, to be shut on Tuesday By Richard Leong NEW YORK, Dec 24 (Reuters) - U.S. government debt prices slipped on Monday as most traders moved to the sidelines before Christmas and given the absence of a U.S. budget deal that averts a package of automatic tax hikes and spending cuts going into effect next year. Analysts downplayed the day's price moves as signals of shifts in market sentiment. There was little impetus for investors to change their bond positions without fresh U.S. economic data or the Federal Reserve buying or selling Treasuries for its bond programs aimed to help the economy, analysts said. The U.S. bond market will close early at 2 p.m. (1900 GMT), an hour after Wall Street. U.S. and most European markets will be shut on Tuesday, while major Asian markets will be open. "The markets are dead. Those traders who are working are making sure positions don't get out of hand due to thin trading," said Lou Brien, market strategist at DRW Trading in Chicago. Overnight Treasuries trading volume was a little more than 10 percent of its average, according to bond broker ICAP. The budget negotiations in Washington have stopped as U.S. President Barack Obama and Congress are on a holiday break. There are seven more days in which they could reach a deal that will steer away from the 'fiscal cliff," a $600 billion worth of tax increases and spending reduction that could phase in next year. Economists have warned this fiscal move could cause a U.S. recession and hurt the global economy. With the deadline only a week away, traders have not completely abandoned hopes of a deal, even one that simply postpones broad changes in federal taxes and spending. "They will probably come up with something unsatisfactory," Brien said. Benchmark 10-year notes were last 2/32 lower in price to yield 1.779 percent, up 0.9 basis point from late on Friday. Thirty-year bonds fell 7/32 with a yield of 2.946 percent, up 1.2 basis point from Friday's close.
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