TREASURIES-Bonds flat, eyeing stocks, oil, ahead of Fed

* Fed rate decision and statement looms

* Oil's slip, stocks' fortunes are key

* Market looks ahead to auctions

By John Parry

NEW YORK, Aug 5 (Reuters) - U.S. Treasury debt prices were little changed early on Tuesday as traders skirted major directional bets ahead of the Federal Reserve's interest rate decision and policy statement expected around 2:15 p.m. ET.

Few analysts expect the U.S. central bank to move its fed funds target rate from the current level of 2 percent at Tuesday's meeting, but the statement could offer clues to rate decisions in the coming months.

Bond investors kept a close eye on stocks, with futures signaling a higher start as oil's earlier dip below $119 per barrel eased some fears about the pain that high energy costs have been exacting on the consumer, who accounts for about two thirds of economic activity.

"Higher energy prices are definitely sapping the consumer," said Doug Bender, managing director with McQueen, Ball & Associates in Bethlehem, Pennsylvania. "Psychologically, oil's fall is a relief," he said. Declining crude prices tend to bolster riskier stocks and draw support away from safe-haven government securities.

Yields remained within the past two weeks' ranges, with the 10-year note just below 4 percent. But Treasury prices could slip if equities rise and draw flows away from government securities and if the Institute for Supply Management's service sector reading comes in broadly in line with forecasts, analysts said.

Economists' median forecast is for ISM's non-manufacturing index, due at 10 a.m. EDT, to stay in contraction territory below 50, but to edge up to a 48.5 reading in July from 48.2 in June.

"I think the mode will be for a bit of a moderation of Treasury prices, with stock futures higher and (bonds) responding to the upcoming supply," said Doug Bender, managing director with McQueen, Ball & Associates in Bethlehem, Pennsylvania.

The Treasury Department plans to sell $17 billion of 10-year notes on Wednesday and $10 billion of 30-year bonds on Thursday.

The benchmark 10-year Treasury note US10YT=RR price, which moves inversely to its yield, traded up 1/32 for a yield of 3.96 percent, versus 3.97 percent late Monday.

Later, analysts will scour the Federal Reserve's statement for any hints about interest rate increases in the months ahead.

Despite commodities' recent plunge, inflation readings remain above the Fed's comfort zone. Should those pressures remain elevated the Fed may have to act before year-end to curb inflation, futures markets suggest.