TREASURIES-Prices barely higher on unease ahead of Fed meeting
* Prices gain after Verizon's record bond, debt sale * $13 bln in 30-year bonds sold at high yield of 3.820 pct * Fed buys $3.36 bln notes due 2021-23 By Luciana Lopez and Karen Brettell NEW YORK, Sept 12 (Reuters) - Prices for U.S. Treasuries traded slightly higher on Thursday, paring early gains on uncertainty over whether the Federal Reserve next week will decide to slow its massive bond-buying program, which overshadowed a 30-year debt sale that saw strong results. Investors are closely focused on what action the Fed might take when it meets on Tuesday and Wednesday on its $85 billion in monthly purchases of Treasuries and mortgage-backed securities, a program designed to drive down long-term interest rates and boost the world's biggest economy. Until policymakers decide whether to taper those purchases, and by how much, investors could remain wary of taking on large positions. "It's just a more uncertain environment," said Kim Rupert, managing director of fixed income analysis at Action Economics in San Francisco. "Investors just don't think yields can go much lower here unless there's some other catalyst," she added. Treasuries had risen earlier in the day but began losing momentum after a sale of $13 billion in 30-year debt at a high yield of 3.820 percent, lower than the market had expected, with a strong direct bid. The sale followed similarly well-received auctions on Tuesday and Wednesday for three-year and 10-year notes, respectively. "It's interesting that all three auctions stopped through this week," said Ian Lyngen, senior government bond strategist at CRT Capital. A record $49 billion Verizon bond deal, as expected, traded well on the open market on Thursday, with the prices rising sharply from the price levels set in the primary market on Wednesday. "The Verizon deal rallied sharply after its issuance, and direct bidding of Treasuries was elevated across all three sectors. It was a good week for U.S. fixed income," Lyngen said. Yields have jumped since May on views the Fed will soon scale back on its quantitative easing. The jump of more than 100 basis points has taken benchmark yields to two-year highs recently. U.S. benchmark 10-year Treasury notes were last up 3/32 in price to yield 2.903 percent, from 2.91 percent late on Wednesday. They have fallen from a two-year high of 3.01 percent on Friday. Thirty-year bonds rose 2/32 in price to yield 3.849 percent, from 3.85 percent on Wednesday. Although markets continue to expect the Fed will taper bond buying at next week's meeting, the weaker-than-expected employment report for August has reduced expectations of how large any cut will be. Economists told Reuters after the jobs report they now expect the Fed to begin paring its bond purchases by $10 billion a month, less than the $15 billion median reduction in Friday's primary dealer poll and a wider poll in August. The Fed bought $3.36 billion in notes due 2021 to 2023 on Thursday as part of its ongoing asset-buying program.