WASHINGTON, May 27 (Reuters) - U.S. Treasury yields on

Wednesday morning edged lower amid continued hopes that

Washington and Tehran were moving toward an agreement after

nearly three months of war.

The U.S. Treasury is due to hold an auction of 5-year notes

in the afternoon while investors await Thursday's releases of

key economic data on inflation, durable goods and first-quarter

economic growth. Several members of the Fed's policy setting

committee were due to speak later Wednesday.

"We're about as unchanged as one can imagine on a day with

no real economic data to speak of," said Guy LeBas, chief fixed

income strategist at Janney. "The timeline for whatever's going

on in Iran to resolve is unknowable but probably a more useful

measure of the inflation outlook than the economic data this

week."

U.S. and Iranian negotiators have been meeting in Doha to

discuss a potential end to the three-month war that has

constrained the global oil market, lifting fuel costs and

inflation around the world. U.S. Secretary of State Marco Rubio

said on Tuesday reaching an agreement could take "a couple of

days."

South Korea's Foreign Ministry said Wednesday that an

Iranian anti-ship missile was likely involved in an attack on a

vessel in the Strait of Hormuz earlier this month. However

Tehran denied any involvement.

The yield on the benchmark U.S. 10-year Treasury note

was last down 2.8 basis points to 4.463%. The

yield on the 30-year bond had also fallen 2.1

basis points to 5.004%.

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 a positive 43.2 basis points.

The two-year U.S. Treasury yield, which typically

moves in step with interest rate expectations for the Fed,

dipped 2.1 basis points to 4.029%.

The 10-year TIPS breakeven rate was last at

2.405%, indicating the market sees inflation averaging about

2.4% a year for the next decade.