May 19 (Reuters) - Yields on U.S. Treasuries ticked

lower in early Tuesday trading after another overnight pause in

the Iran conflict and a dip in oil prices.

The yield on the benchmark 10-year Treasury note

was last down less than a basis point (bp) at 4.617%. It had

climbed as high as 4.659% on Monday, which was its highest level

in 15 months.

The two-year Treasury note's yield, which

typically moves in step with interest rate expectations for the

Federal Reserve, was last down 1.2 bps at 4.078%. It reached a

14-month high of 4.105% early Monday.

Yields climbed in overnight Monday trading caused by a

sell-off in U.S. and global bond markets following a rise in

crude oil prices past $111 per barrel. Rising oil prices on

Monday and last week exacerbated bond investors' inflation

concerns, as deal talks in the ongoing conflict with Iran showed

little progress.

Oil prices were down slightly on Tuesday, with crude oil

prices just over $110 per barrel.

The 30-year Treasury bond's yield, which is seen

as a barometer of political risk, was up 2.9 bps to above 5.15%

after reaching its highest level in over a year on Monday.

Analysts anticipate the 30-year's yield could rise further in

the coming weeks.

"People are not going to want to add duration risk until

there's clarity around the Middle East," said Vail Hartman, U.S.

rates strategist at BMO Capital Markets.

"I wouldn't be surprised if the sell-off extended and ...

new yield peaks established before we see a wave of buying," he

added.

Data last week showed U.S. inflation was accelerating due

to rising energy prices, with market participants worried that

even a near-term end to the war may not bring energy prices

down.

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 last at 53.51 bps.

Investors are now pricing in a 46.6% chance that the Fed

could raise rates in December, and a 94.2% chance it maintains

current rates at its next meeting in June, according to the CME

FedWatch tool.

The Treasury Department is slated to auction 20-year

bonds on Wednesday, which market participants will

watch closely for signs of cooling investor demand.