TREASURIES-Yields rise on slightly lower weekly jobless claims

Jan 21 (Reuters) - U.S. Treasury yields were mostly higher and the yield curve steepened on Thursday after data showed new claims for jobless benefits declined modestly last week. The benchmark 10-year yield was last up 2.4 basis points at 1.1143%. A closely watched part of the yield curve measuring the gap between yields on two- and 10-year Treasury notes was last 3.58 basis points higher at 98.19 basis points. Initial claims for state unemployment benefits totaled a seasonally adjusted 900,000 for the week ended Jan. 16, compared to 926,000 in the prior week, the Labor Department reported on Thursday. Economists polled by Reuters had forecast 910,000 applications in the latest week. Having flat or slightly improved data for the second week of January "helps argue that the trend is not towards rising claims," said Guy LeBas, chief fixed income strategist at Janney Capital Management in Philadelphia. “There was a substantial contingent in the macro-fundamental camp that was concerned about further deterioration in the U.S. labor markets and at least the numbers from today suggest it’s not happening, at least not right now," he said. On the supply front, an auction of $15 billion of 10-year Treasury Inflation-Protected Securities (TIPS) was set for later on Thursday. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was last down less than a basis point at 0.129%. January 21 Thursday 9:54AM New York / 1554 GMT Price Current Net Yield % Change (bps) Three-month bills 0.08 0.0811 0.000 Six-month bills 0.09 0.0913 0.000 Two-year note 99-254/256 0.129 -0.002 Three-year note 99-200/256 0.1986 0.003 Five-year note 99-152/256 0.4583 0.009 Seven-year note 98-232/256 0.7873 0.014 10-year note 97-200/256 1.1143 0.024 20-year bond 94-240/256 1.6763 0.031 30-year bond 94-84/256 1.8742 0.032 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 7.25 -0.25 spread U.S. 3-year dollar swap 7.25 0.00 spread U.S. 5-year dollar swap 7.75 0.25 spread U.S. 10-year dollar swap 0.50 0.50 spread U.S. 30-year dollar swap -26.25 0.00 spread (Reporting by Herbert Lash in New York and Karen Pierog in Chicago; editing by Chizu Nomiyama)