* Ten-year notes nudged up 1.5/32 in price to yield 1.988 percent , compared to 1.992 percent in late US trade.

* In a report prepared for ministers meeting in Poland on Friday and Saturday, senior EU officials said the 17-nation euro area faces a "risk of a vicious circle between sovereign debt, bank funding and negative growth".

* "Stocks are catching up with the relief rally on Wall Street, but bonds are being supported too as investors fret over a possible rating cut to Italy and a Greek default," said a trader at a European bank.

* Speculation is rife that Moody's might downgrade its rating on Italian debt soon as it is almost 90 days since the US agency said it could cut its Aa2 rating.

* Also attracting attention is Spain's debt auction later in the day. The country is expected to pay a heavy premium to borrow up to 4 billion euros via three bond issues after Italy had to pay the highest interest rates in the euro era to sell five-year debt on Tuesday.

* Expectations that the Federal Reserve will introduce new easing measures next week are also seen keeping the 10-year yield below 2 percent in the near future.

* The US Treasury department will at 1500 GMT announce weekly 3-month and 6-month bill offerings, as well as sales of 52-week bills and 10-year inflation-protected securities.

* Expectations that the Federal Reserve will not target the longest US government debt maturity in any new stimulus programme to help the economy have reduced the allure of the 30-year issue, investors said.

* Federal Reserve Chairman Ben Bernanke will give brief opening remarks before a conference in Washington, D.C. at 1245 GMT.

Copyright Reuters, 2011