SINGAPORE, Feb 19 (Reuters) - U.S. 10-year Treasuries slipped on Tuesday but their losses were limited due to caution ahead of a forthcoming election in Italy and concerns about the potential economic impact of looming U.S. budget cuts.
* Ten-year notes fell 2/32 in price to yield 2.012 percent in Asia, up roughly 1 basis point from late U.S. trade on Friday. The U.S. bond market was closed on Monday for Presidents' Day.
* In the near term, Treasuries could find some support due to worries about political uncertainty in Italy before elections on Feb. 24-25, and concerns about the potential economic impact of U.S. spending cuts that are due to kick in on March 1, said Tomohisa Fujiki, interest rate strategist for BNP Paribas in Tokyo.
"Our view is that bond yields are more likely to head lower," Fujiki said, adding that the 10-year Treasury yield could drop to levels around 1.85 percent by the end of this month.
* If Congress fails to act, about $85 billion in across-the-board spending cuts will begin on March 1, and analysts say the austerity could hurt the U.S. economy.
* "You don't sell Treasuries when the markets are a bit uneasy," said a trader for a European brokerage house in Tokyo, adding that the market was likely to stay very cautious ahead of the Italian elections.
Market players are worried Italy's Feb. 24-25 vote could fragment parliament and hamper the future government's reform efforts.