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SINGAPORE, Feb 22 (Reuters) - U.S. 10-year Treasuries slipped on Friday, giving back some of the gains made the previous day, when bonds rose on worries about Europe's economic outlook and data pointing to a tepid U.S. recovery.
* Ten-year notes fell about 3/32 in price to yield 1.986 percent. The yield rose 1 basis point from late U.S. trade on Thursday and pulled away from Thursday's intraday low of roughly 1.957 percent.
* Later on Friday, Treasuries could take their cues from a reading of German business morale, said Tomohisa Fujiki, interest rate strategist for BNP Paribas in Tokyo.
"If the numbers are poor, we could see a renewed acceleration in moves toward avoiding risk," Fujiki said. Such a heightening in risk aversion can give a lift to safe haven assets such as Treasuries.
To be sure, business confidence in Europe's biggest economy is seen likely to have improved this month. The German Ifo business climate index is seen ticking up for a fourth straight month to 105.0 in February, according to a Reuters poll.
* Treasuries had risen on Thursday as surveys showed an unexpected worsening in business conditions across the euro zone this month, undermining hopes the region might soon emerge from recession.
In addition, a raft of U.S. data on Thursday pointed to a still tepid recovery and supported the argument for the Federal Reserve to maintain its monetary stimulus.