TREASURIES-Yields mixed in choppy trading as ECB, stocks weigh

    * ECB's Draghi comments weigh on Bunds, Treasuries
    * U.S. import prices drop as inflation stays benign
    * U.S. 30-year bond auction shows decent demand

 (Adds comment, updates prices)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Dec 13 (Reuters) - U.S. Treasury yields were
narrowly mixed on Thursday, generally trading in line with U.S.
equities, with investors also focused on the European Central
Bank's lower growth and inflation forecasts for next year as
well as a warning of economic risks to the region.
    German 10-year government bond yields fell more
than a basis point as ECB President Mario Draghi spoke and was
last at 0.264 percent.
    Other high-grade euro zone bond yields also fell 1-2 basis
points in the aftermath of Draghi's comments.

    U.S. Treasury yields initially moved in line with German
Bunds, before the market started moving in tandem with stocks.
    "The market, over the past month or so, has been highly
sensitive to what's going on in stocks," said Tom Simons, money
market economist, at Jefferies in New York.
    "There's no reason why that should change. Now, we're just
kind of drifting until we get the next set of macro headlines,"
he added.
    The ECB was the market's focus in the U.S. morning session.
    In a news conference, Draghi said the balance of risks on
the growth outlook was moving to the downside due to
"geopolitical factors, the threat of protectionism,
vulnerabilities in emerging markets, and financial market
volatility."
    The ECB also trimmed its regional growth projection to 1.7
percent and inflation forecast to 1.7 percent for 2019, further
spurring buying in both the U.S. and European bond markets

    A U.S. 30-year bond auction on Thursday saw decent demand,
spurring some buying in the afternoon.
    The bond picked up a yield of 3.165 percent, compared with
3.167 percent at the bid deadline. Bids totaled $36.9 billion
for a 2.31 bid-to-cover ratio, better than the weak 2.06 from
the November refunding.    
    U.S. yields on Thursday were also pressured by a
steeper-than-expected drop in November's U.S. import prices,
which followed Wednesday's tame consumer price reading. Both
reports backed a growing view that the Federal Reserve could
slow the pace of interest rate hikes.
    Data showed U.S. import prices dropped 1.6 percent last
month, the biggest decline since August 2015, after an unrevised
0.5 percent increase in October.
    In late trading, benchmark U.S. 10-year note yields were at
2.911 percent, from 2.906 percent late on Wednesday.
    U.S. 30-year bond yields were up at 3.161 percent
, from 3.148 percent on Wednesday.
    On the short end of the curve, U.S. 2-year yields slipped 
to 2.757 percent, compared with Wednesday's 2.77 percent
.
    
     Thursday, Dec. 13 at 1510 EST (2010 GMT):
                                                      
                                                      
                                                      
                               Price        Current   Net
                                            Yield     Change
                                            (pct)     (bps)
 Three-month bills             2.3725       2.4198    -0.008
 Six-month bills               2.4875       2.554     0.000
 Two-year note                 99-252/256   2.7579    -0.012
 Three-year note               99-158/256   2.759     -0.014
 Five-year note                100-142/256  2.7545    -0.011
 Seven-year note               100-72/256   2.8301    0.000
 10-year note                  101-212/256  2.9113    0.005
 30-year bond                  104-32/256   3.1607    0.013
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        14.25         1.00    
 spread                                               
 U.S. 3-year dollar swap        11.75         0.50    
 spread                                               
 U.S. 5-year dollar swap        10.50         0.25    
 spread                                               
 U.S. 10-year dollar swap        3.25         0.00    
 spread                                               
 U.S. 30-year dollar swap      -14.50        -0.25    
 spread                                               
 
 (Reporting by Gertrude Chavez-Dreyfuss
Editing by Chizu Nomiyama)
  

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