(Updates with reaction to Chicago PMI)

NEW YORK (Reuters) - U.S. Treasuries remained
steady at higher levels Friday after a higher-than-forecast
reading on the Chicago Purchasing Managers Index.

The benchmark U.S. 10-year Treasury note, up
16/32 in price before the report came out, remained at that
level, yielding 2.91 percent versus 2.99 percent late
Thursday.
(Editing by James Dalgleish)