TREASURIES-US yields nudge lower as markets await Fed speakers

WASHINGTON, Oct 7 (Reuters) - Benchmark U.S. yields were edging lower on Tuesday morning as investors awaited an auction of three-year notes and a series of speeches from Federal Reserve policymakers ahead of the central bank's next meeting later this month.

Fed members and investors say they are partly flying blind as a federal government shutdown, now in its seventh day, is preventing the production of crucial economic data. U.S. yields had been floating higher amid soft demand since Friday, when the Labor Department missed the September employment report.

Federal Reserve Board members Michelle Bowman, the vice chair for supervision, and newly installed Governor Stephen Miran, are both due to speak on Tuesday morning, with public appearances during the day also from the presidents of the Atlanta and Minneapolis Federal Reserve Banks.

"I think that the market is really just in search of any new piece of information they can find to fill the void that's been created by the government shutdown," said Vail Hartman, U.S. rates strategist at BMO Capital Markets.

"The market's been trapped in a fairly well-defined range between 4.10 and 4.20 in the 10-year sector. I would expect that we continue to oscillate in this range until the next big macro shock, which likely won't come in the form of data."

Given that the Fed has already signaled a rate cut is coming this month, the lack of a full set of data could weigh against deviating from that course of action, Hartman added.

The yield on the benchmark U.S. 10-year Treasury note US10YT=TWEB was last down 0.6 basis points to 4.156%. The yield on the 30-year bond US30YT=TWEB fell 1 basis point to 4.748%.

A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes US2US10=TWEB, seen as an indicator of economic expectations, was at a positive 55.7 basis points.

The two-year US2YT=TWEB U.S. Treasury yield, which typically moves in step with interest rate expectations for the Fed, was unchanged at 3.597%.

The breakeven rate on five-year U.S. Treasury Inflation-Protected Securities (TIPS) US5YTIP=TWEB was last at 2.410% after closing at 2.412% on October 6.

The 10-year TIPS breakeven rate US10YTIP=TWEB was last at 2.347%, indicating the market sees inflation averaging about 2.3% a year for the next decade.