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TREASURIES-Yield steady, U.S.-China trade in focus

By Karen Brettell

(Adds Huawei report, updates prices) * Geopolitical tensions between U.S., China in focus * Month-end demand helps bond markets * Next week's jobs report next major economic focus By Karen Brettell NEW YORK, Nov 29 (Reuters) - U.S. Treasury yields were steady on Friday after China said it would retaliate after the United States passed legislation backing anti-government protesters in Hong Kong, potentially complicating the chance of a bilateral trade deal. Bond yields fell overnight after China said on Thursday that it would take "firm counter measures" in response to the legislation, and that attempts to interfere in the Chinese-ruled city were doomed to fail. Officials in both countries have recently talked up the odds of reaching a "phase one" trade deal, which may include a rollback in tariffs placed on each others' goods. Sources told Reuters on Friday the U.S. government might expand its power to stop more foreign shipments of products with U.S. technology to China's Huawei Technologies Co Ltd , after its blacklisting of the world's largest telecoms equipment maker had failed to cut off its supplies. The benchmark 10-year note yielded 1.767%, little changed from late Wednesday. The bond market was closed on Thursday for the U.S. Thanksgiving Day holiday and will close early at 2:00 p.m. EST on Friday. Trading volumes were light as many traders and investors remained on holiday through the weekend. Month-end demand by investors rebalancing bond portfolios was seen as helping demand for bonds on Friday. The New York Federal Reserve injected $88.45 billion in liquidity into the overnight repurchase agreement market on Friday as part of its ongoing operations to support short-term funding markets. Funding stresses in September prompted the Federal Reserve to intervene and it has pledged to continue the operations through the year-end period, when banks and other investors reduce risk taking, which can elevate funding stresses. The next major U.S. economic focus will be the November jobs report due next Friday. November 29 Friday 1:25PM New York / 1825 GMT Price Current Net Change Yield % (bps) Three-month bills 1.555 1.5825 -0.026 Six-month bills 1.58 1.619 0.000 Two-year note 99-202/256 1.6079 -0.018 Three-year note 100-14/256 1.6059 -0.011 Five-year note 99-112/256 1.6177 -0.006 Seven-year note 99-100/256 1.7178 -0.001 10-year note 99-216/256 1.7671 0.000 30-year bond 103-240/256 2.1949 0.003 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 1.00 0.75 spread U.S. 3-year dollar swap -2.50 0.75 spread U.S. 5-year dollar swap -3.75 1.00 spread U.S. 10-year dollar swap -7.25 0.75 spread U.S. 30-year dollar swap -33.25 0.25 spread (Editing by Chizu Nomiyama and Richard Chang)