TREASURIES-Yields mixed amid light trading volume

 (Recasts with upcoming Fed conference, updates yields, adds
analyst comment)
    By Karen Pierog
    CHICAGO, Aug 21 (Reuters) - U.S. Treasury yields were mixed
on Friday as the market drifted in light trading and looked
ahead to next week's Federal Reserve Jackson Hole virtual
economic policy conference and $148 billion of note sales.
    The benchmark 10-year yield was last down less
than a basis point at 0.6412%.
    "It's been a very quiet afternoon just on summer flows,"
said Justin Lederer, an interest rate strategist at Cantor
Fitzgerald in New York.
    He said light summer volume was keeping the market in check,
although a rally on the long end of the curve pushed yields
    The 30-year yield was last down 2.1 bps at
    Earlier on Friday, yields rose after data firm IHS Markit
reported that its flash U.S. Composite PMI Index rose to a
reading of 54.7 this month - the highest since February 2019 -
from 50.3 in July. Its flash - or preliminary - indicator for
the manufacturing sector stood at its highest since January 2019
and for the services sector it was the highest since March
    Remarks by Fed Chair Jerome Powell next Thursday could bring
added volatility to Treasuries "if he says anything out of the
realm of what expectations are," according to Lederer.    
    Meanwhile, a barrage of Treasury supply will continue next
week with $50 billion of two-year notes on Tuesday, $51 billion
of five-year notes on Wednesday, and $47 billion of seven-year
notes on Thursday.
    A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes, which is viewed as an indicator of
economic expectations, was last at 49.30 bps, about a basis
point lower than at Thursday's close.
August 21 Friday 2:37PM New York / 1937 GMT
                               Price        Current   Net
                                            Yield %   Change
 Three-month bills             0.095        0.0963    0.000
 Six-month bills               0.115        0.1167    -0.002
 Two-year note                 99-245/256   0.1473    0.006
 Three-year note               99-222/256   0.1698    0.008
 Five-year note                99-228/256   0.2723    0.004
 Seven-year note               99-116/256   0.4552    0.002
 10-year note                  99-216/256   0.6412    -0.003
 20-year bond                  99-212/256   1.1346    -0.016
 30-year bond                  100-120/256  1.3559    -0.021
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
 U.S. 2-year dollar swap         7.50         0.00    
 U.S. 3-year dollar swap         6.50         0.00    
 U.S. 5-year dollar swap         5.00         0.50    
 U.S. 10-year dollar swap       -0.25         1.00    
 U.S. 30-year dollar swap      -38.00         2.25    

 (By Karen Pierog
Editing by Chizu Nomiyama and Nick Macfie)

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