TREASURIES-US yields rise after higher-than-expected Q3 GDP readout

By Matt Tracy

Dec 23 (Reuters) - U.S. Treasury yields ticked higher on Tuesday after new data showed the U.S. economy grew more than forecast in the third quarter.

The yield on 10-year Treasury notes US10YT=RR was up 2.71 basis points (bps) at 4.198%.

The yield on the 30-year Treasury bond US30YT=RR was last up 2 bps at 4.863%.

A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes US2US10=RR, seen as an indicator of economic expectations, was at 64.6 bps.

The two-year US2YT=RR U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 4.7 bps at 3.55%.

The U.S. dollar 5-year forward inflation-linked swap USIL5YF5Y=R, seen by some as a better gauge of inflation expectations due to possible distortions caused by the Fed's quantitative easing, was last at 2.439%.

New GDP data from the Commerce Department on Tuesday showed the U.S. economy grew by 4.3% in the third quarter, which was above Dow Jones' forecast of 3.2%.

The growth was due in large part to strong spending by U.S. consumers, according to the Commerce Department.

"If the economy keeps producing at this level, then there isn’t as much need to worry about a slowing economy and concerns may actually flip back to the price-stability constraint," said Chris Zaccarelli, chief investment officer for Northlight Asset Management, in written comments.

The Treasury Department has scheduled several major debt auctions this holiday week. It will auction $70 billion in 5-year notes US5YT=RR later on Tuesday, which will be followed by a $44 billion seven-year note US7YT=RR auction on Wednesday.

A $69 billion two-year note auction on Monday met with tepid investor demand, as it saw a lower bid-to-cover ratio than previous such auctions.

The bond markets will close early on Wednesday at 2 p.m. and remain closed through the Christmas holiday on Thursday.