TREASURIES-US bonds dip on Iran escalation fears, Hormuz uncertainty

* Market seems "comfortable" with no US-Iran resolution

* Conflicting signals on Hormuz control ramp up uncertainty

* Israel says ready to resume attacks on Iran

* US jobless claims increase, business activity rises

By Gertrude Chavez-Dreyfuss

NEW YORK, April 23 (Reuters) - U.S. Treasuries slid on Thursday in largely range-bound trading, with investors wary of taking big positions as the fragile ceasefire between the United States and Iran showed signs of strain.

The Gulf conflict does not appear on the path to a resolution nor a reopening of the crucial Strait of Hormuz artery, and both Iranian and Israeli officials threatened renewed attacks on Thursday. The uncertain expectations for the war have curbed inflows into Treasuries.

"There's more of this wait-and-see approach from investors given concerns around the war keeping on for a bit longer. So people are asking what does this mean for oil prices? What does this mean for inflation?" said Anders Persson, chief investment officer and head of global fixed income at Nuveen in Charlotte, North Carolina.

"There has been less conviction to take more active positioning from a bond perspective because we don't know where things are headed."

In afternoon trading, the benchmark 10-year yield, which moves inversely to prices, was up 2.6 basis points at 4.319% . U.S. 30-year yields edged up 1.2 bps at 4.913% .

On the shorter end of the curve, U.S. two-year yields, which reflect interest rate expectations, were up 2.3 bps at 3.817%.

The crucial Strait of Hormuz remains blockaded, sending oil prices higher. But economic reports suggest U.S. business activity is remaining resilient, despite historically weak levels of consumer confidence. Iran showed off its tightened grip over the strait with a video of its commandos storming a huge cargo ship, even as President Donald Trump said the United States had "total control" over the strait, and that it was "sealed up tight" until Iran makes a deal. Israel warned on Thursday that it was ready to restart attacks. Defence Minister Israel Katz said Israel was waiting for a "green light" from the U.S. to resume the war, saying that if it did, it would begin by targeting Supreme Leader Ayatollah Mojtaba Khamenei and "return Iran to a dark age."

'PARALYSIS-DRIVEN' TYPE OF MARKET STABILITY "It seems that the market is shockingly comfortable with an unresolved situation with Iran," said Zachary Griffiths, head of investment grade and macro strategy at CreditSights in Charlotte, North Carolina.

"So in our conversations with clients, we're suggesting that this headline-, paralysis-driven type of market stability may persist." U.S. crude futures were more than 3% higher at $95.84 per barrel on Thursday after Iranian media said its air defenses were activated over Tehran, lifting Treasury yields as well. U.S. yields earlier ticked lower, after initial claims for state unemployment benefits rose 6,000 to a seasonally adjusted 214,000 for the week ended April 18. Economists polled by Reuters had forecast 210,000 claims for the latest week. S&P Global said its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to 52.0 this month. That followed a 50.3 reading in March, the lowest since September 2023.

The reports suggested that the Federal Reserve would be in no rush to resume cutting interest rates.

U.S. rate futures on Thursday showed about 7 bps of easing this year, down from 10 bps late on Wednesday, and significantly lower than the more than 50 bps priced in before the Iran war, according to LSEG estimates.

The U.S. Treasury found solid demand for its auction of $26 billion in five-year Treasury Inflation-Protected Securities, analysts said.

The securities priced at 1.367%, slightly higher than the expected rate at the bid deadline, suggesting investors demanded a small premium.

The bid-to-cover ratio, a measure of demand, was 2.57, compared with a six-auction average of 2.41. (Reporting by Gertrude Chavez-Dreyfuss; Editing by Andrea Ricci)