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* Treasuries prices fall on hopes for Italian pro-reform victory * Bernanke testimony on Tuesday in focus for bond purchase signals * Treasury to sell $99 bln new supply this week, $35 bln 2-year notes Mon * Fed will buy $2.75 bln-$3.50 bln in debt due 2020-2023 By Karen Brettell NEW YORK, Feb 25 (Reuters) - U.S. Treasuries yields rose on Monday as riskier assets in Europe including Italian government debt rallied on hopes of a victory for a pro-reform Italian government, reducing demand for lower-risk U.S. debt. Some investors also remained hesitant to buy Treasuries as they continued to mull the likelihood that the Federal Reserve will end its bond purchase program before year-end. Exit polls issued after voting closed in Italy's parliamentary election showed the centre-left coalition led by Pier Luigi Bersani was leading Silvio Berlusconi's centre-right bloc. "All indications are that there will be no large surprises in the elections," said Tom Tucci, head of Treasuries trading at CIBC in New York. Investors were also reticent about buying bonds before Fed Chairman Ben Bernanke is due to deliver his semi-annual testimony to the U.S. Senate Banking Committee on Tuesday morning, which will be closely watched for any signs that the Fed may end its bond purchase program sooner than most expect. Indications that some Fed board members are increasingly cautious of continuing the U.S. central bank's bond purchase program has heightened speculation that the Fed may end the buybacks before year-end. "I don't think you have enough momentum in front of Bernanke to generate buyers at higher prices yet," Tucci said. "We had a pretty good rally last week, but I don't think people are true believers that there is a significant move to lower yields." Benchmark 10-year notes yields have held in a range from around 1.91 percent to 2.06 percent since Jan 28, after trying but failing to break up support at around 2.03 percent to 2.06 percent several times in the past few weeks. The notes fell 9/32 in price on Monday to yield 2.00 percent, up from 1.96 percent late on Friday. Investors are also focused on an automatic $85 billion in across-the board spending cuts that are due to come into force on Friday unless lawmakers reach a deal on avoiding it, which may boost demand for Treasuries as the deadline nears. President Barack Obama and others have called warned that the measures will harm the country's still fledging economic recovery. The Treasury will sell $35 billion in two-year notes on Monday, the first auction of a total $99 billion in supply this week. The government will auction $35 billion in five-year notes on Tuesday and $29 billion in seven-year notes on Wednesday. The Federal Reserve will purchase between $2.75 billion and $3.50 billion in debt due 2020 to 2023 on Monday as part of its ongoing bond purchase program meant to hold down long-term borrowing rates and help reduce the unemployment rate.