* Selling continues in the stock market
* Treasury yield curve could steepen
* Safety bids seen in shorter Treasury maturities
By Emily Flitter
NEW YORK, Aug 11 (Reuters) - U.S. Treasury prices slipped on Thursday ahead of a weekly report on jobless claims, but losses were tempered by continued selling in stock futures amid more worries about Europe.
Stock futures showed expectations of a drop in the major indexes of between 0.3 percent and 1 percent. Treasury prices, meanwhile, were falling at the back end of the yield curve while two-year and three-year notes were holding steady at the previous day’s price levels.
“There are still concerns over the European banking system,” said Mark McCormick, a currency strategist at Brown Brothers Harriman in New York.
“Peripheral CDS are up despite the negative turn in bond yields. I think it’s a signal that the European Central Bank is out there buying peripheral debt and supporting the bonds while people are still nervous about those countries.”
The 30-year Treasury bond was off nearly a point in price ahead of a 1 p.m. (1700 GMT) auction by the Treasury Department of $16 billion in new 30-year bonds.
The 30-year Treasury bond US30YT=RR was last 24/32 lower in price and yielding 3.55 percent, up from 3.52 percent at Wednesday’s close.
The benchmark 10-year Treasury note US10YT=RR was yielding 2.17 percent, up from 2.12 percent late on Wednesday.
McCormick said most of the money coming out of stocks was going into shorter-dated Treasuries, not 10-year notes and bonds.
“Most of the-people are a little bit skeptical about taking duration risk right now,” he said. “A lot of the safe-haven bids are coming into the short end so you could see some steepness here.” (Editing by Chizu Nomiyama)