TREASURIES-Prices dip in light trade before Bernanke speaks
* Prices slip, Fed minutes next Wednesday in focus * Bernanke to speak on Friday, no surprises seen * Volumes light on U.S. storm, Japan closed for holiday By Karen Brettell NEW YORK, Jan 3 (Reuters) - U.S. Treasuries prices fell on Friday, sending benchmark 10-year yields back over 3 percent, before Federal Reserve Chairman Ben Bernanke was due to speak at an economics conference. Volumes were light as a winter storm kept many traders on the U.S. East Coast away from their desks, and after the Japanese market was closed. Bernanke will speak along with a number of other Fed members, though analysts see it unlikely that the outgoing Chairman will provide much fresh insight into Fed policy. The Fed's meeting minutes for December, slated for release next Wednesday, will next take focus for signs over how far the Fed may further pare back its bond purchases. The U.S. central bank said last month it would cut its mortgage-backed securities and Treasuries purchases by $10 billion to $75 billion a month. The meeting minutes, new corporate supply and traders adjusting to the Fed's smaller purchase schedule when it begins purchases again next week are likely to keep investors on the sidelines on Friday, said Jim Vogel, an interest rate strategist at FTN Financial in Memphis, Tennessee. "There's no need to rush in right now," he said. Some traders see Treasuries as likely to become more volatile as investors adjust to the change in leadership at the Fed, and to the reduction in the bond purchase program. The U.S. Senate has set a Monday vote on President Barack Obama's choice of Janet Yellen to chair the Federal Reserve and replace Bernanke. "In 2014 you should see a lot more curve volatility, rate volatility," said Scott Graham, head of U.S. government bond trading at BMO Capital Markets in Chicago. New supply next week may also send yields higher, he said. The Treasury will sell $64 billion next week in new 3-, 10- and 30-year bonds. Benchmark 10-year notes were last down 2/32 in price to yield 3.000 percent, up from 2.985 percent late on Thursday. The yields have fallen from a two-and-a-half-year high of 3.04 percent on Thursday. The Fed will buy $40 billion in Treasuries in January, down from $45 billion in December. The first purchase will be of between $1 billion and $1.50 billion in bonds due 2036 and 2043 on Monday.
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