TREASURIES-Yields fall from near 3-week highs following cooling wage, housing data

By David Randall NEW YORK, Jan 31 (Reuters) - U.S. Treasury yields dipped from nearly 3-week highs on Tuesday following economic data that showed slowing wage growth and a cooling housing market. The Employment Cost Index rose 1% in the fourth quarter, down from a peak of 1.4% in the first quarter of 2022, while wages and salaries grew 1% compared to 1.3% in the previous quarter, according to the U.S. Bureau of Labor Statistics. Home prices, meanwhile, rose 6.8% in November compared with the same time last year, and slowed from the 8.7% gain in October, according the S&P CoreLogic Case-Shiller Home Price composite index of 20 metropolitan areas. Rising wages and housing costs have been chief concerns of the Federal Reserve in its battle with inflation. The central bank is widely expected to raise benchmark interest rates by 25 basis points to a range of 4.50% and 4.75% at the conclusion of its policy meeting on Wednesday. "All eyes are on the Fed this week and the Street's expectations for a 25 basis point rate hike. Investors will keenly listen to Chairman Powell's comments for any indication of the Fed wavering from its aggressively hawkish stance," said Craig Johnson, chief market technician at Piper Sandler. The yield on 10-year Treasury notes was down 5.3 basis points to 3.498%. The yield on the 30-year Treasury bond was down 3 basis points to 3.630%. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at -70.3 basis points. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 6.2 basis points at 4.199%. January 31 Tuesday 9:08AM New York / 1408 GMT Price Current Net Yield % Change (bps) Three-month bills 4.585 4.7038 0.043 Six-month bills 4.66 4.8387 -0.010 Two-year note 99-221/256 4.197 -0.064 Three-year note 99-238/256 3.8999 -0.068 Five-year note 99-128/256 3.6102 -0.073 Seven-year note 99-162/256 3.5597 -0.067 10-year note 105-48/256 3.4939 -0.057 20-year bond 103-120/256 3.7498 -0.041 30-year bond 106-200/256 3.6256 -0.034 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 28.00 0.25 spread U.S. 3-year dollar swap 14.00 -0.50 spread U.S. 5-year dollar swap 5.50 -0.50 spread U.S. 10-year dollar swap -2.00 0.25 spread U.S. 30-year dollar swap -38.25 -0.50 spread (Reporting by David Randall; Editing by Bernadette Baum)