LONDON Jan 8 U.S. government bonds were steady in Europe on Tuesday, taking a breather after last week's sharp falls as investors ready for $66 billion of debt sales this week.
* Better-than-expected services sector and jobs data last week accelerated a sell-off in safe-haven assets triggered by a last-minute deal to avert a fiscal crisis in the United States.
* The selling took benchmark 10-year yields to eight-month highs of 1.9750 percent last week. This prompted some investors to buy back the cheapened paper this week and wait for more signs of an economic recovery before considering selling again.
* The U.S. 10-year T-note yield was last 0.2 basis points lower on the day at 1.8992 percent. T-note futures were 3/64 higher at 131-20/32.
* "We're likely to be hovering around that 1.90 (percent) level for now, but if we see further signs of improvement in the U.S. economy and risk appetite we could see yields back towards 2 percent," RIA Capital Markets bond strategist Nick Stamenkovic said.
* "Any upside for Treasuries (prices) is also unlikely ahead of upcoming supply so we're going to be rangebound near-term."
* The Treasury is scheduled to sell $32 billion in three-year notes on Tuesday, $21 billion in 10-year notes on Wednesday and $13 billion in 30-year bonds on Thursday.