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TREASURIES-Yields just below three-month highs before Trump speech

By Karen Brettell

* Trump speech on Tuesday in focus * Fed's Powell to speak on Wednesday * CPI, retail sales data due this week By Karen Brettell NEW YORK, Nov 12 (Reuters) - U.S. Treasury yields held just below three-month highs on Tuesday as investors waited on a speech by U.S. President Donald Trump for new indications on how close the United States and China are to agreeing to the first phase of a trade deal. Optimism that the two countries will reach a deal to roll back tariffs has boosted stocks and reduced demand for safe haven U.S. bonds in the past week, despite mixed messaging about tariff removals. “There have been swirling headlines that really haven’t dented the belief that regardless of what people say on any given day, that phase one is going to get executed and signed at some point before the end of the year,” said Jim Vogel, an interest rate strategist at FHN Financial in Memphis, Tennessee. The world's two biggest economies have agreed to roll back tariffs if a deal is completed, officials from both sides said on Thursday. Trump said on Friday, however, that he has not agreed to roll back tariffs, feeding doubts about when the 16-month trade war may end. Trump is expected to announce on Tuesday that he is delaying a decision on whether to slap tariffs on cars and auto parts imported from the European Union, likely for another six months, EU officials said. Benchmark 10-year notes were last up 1/32 in price to yield 1.931%. The yields rose to 1.973% on Thursday on optimism a trade deal would be reached, which was the highest since August 1. Investors are also focused on economic data for further clues about whether the Federal Reserve is likely to continue cutting rates. Optimism about the U.S. economy has increased since jobs data for October and a service sector report last Tuesday beat expectations. This week’s major U.S. economic releases include consumer price data for October, which will be released on Wednesday, and retail sales data for October released on Friday. Federal Reserve Chairman Jerome Powell will speak before lawmakers in Washington on Wednesday. (Editing by David Gregorio) )