(Adds quotes, U.S. data, Brexit details, breakeven rates, udpdates prices) By Karen Brettell NEW YORK, Dec 23 (Reuters) - U.S. Treasury yields jumped on Wednesday and a key part of the yield curve reached its steepest in more than three years as Britain appeared to be close to a deal to leave the European Union, and as France reopened its border with Britain. A reporter with Britain"s Daily Mail said a Brexit deal had already been done, and rumours flew that British Prime Minister Boris Johnson would make an announcement on Wednesday evening to avoid a turbulent economic rupture on New Year"s Day. Treasury yields rose “as a function of the positive headlines associated with a potential Brexit deal,” said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets in New York. That said, Lyngen warned that thin trading conditions this week were amplifying moves, saying that there is “low liquidity and somewhat choppy price action.” Benchmark 10-year yields rose 4 basis points to 0.956%, after earlier rising to 0.973%, the highest since Dec. 7. The yield curve between two-year and 10-year yields steepened to 85 basis points, the widest spread since October 2017. Breakeven rates on 10-year TIPS, which measure expected annual inflation for the next decade, jumped to 1.98%, the highest since at least early 2019. Risk appetite was also boosted as France reopened its borders to passengers from Britain, ending a blockade intended to stop the spread of a new, more infectious coronavirus variant, but which has held up thousands of lorries before Christmas. The positive news overturned an earlier safety bid for U.S. bonds after U.S. President Donald Trump threatened to not sign an $892 billion coronavirus bill, saying that sums paid to individuals were too small. Trump said he wanted Congress to increase the amount in the stimulus checks to $2,000 for individuals or $4,000 for couples, instead of the "ridiculously low" $600 for individuals that is in the bill. Data on Wednesday showed that the number of Americans filing first-time claims for unemployment benefits unexpectedly fell last week, though remaining elevated as more businesses face restrictions and consumers hunker down amid an explosion of new COVID-19 cases. Other data showed consumer spending dropping in November for the first time since the recovery. Even housing, the economy"s star performer, is getting tired with sales of new single-family homes tumbling to a five-month low in November. “The numbers were on the whole weaker than even a pessimist would have thought,” said Jim Vogel, an interest rate strategist at FHN Financial in Memphis, Tennessee. “This will dampen some of the thinking about fourth quarter GDP.” The bond market will close early at 2 p.m. EST on Thursday and be closed on Friday for Christmas Day. December 23 Wednesday 2:28PM New York / 1928 GMT Price Current Net Yield % Change (bps) Three-month bills 0.085 0.0862 -0.003 Six-month bills 0.095 0.0964 0.005 Two-year note 100-1/256 0.123 0.004 Three-year note 99-218/256 0.175 0.005 Five-year note 99-250/256 0.3798 0.015 Seven-year note 99-184/256 0.6666 0.030 10-year note 99-60/256 0.9563 0.038 20-year bond 97-240/256 1.4952 0.047 30-year bond 98-56/256 1.7012 0.047 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 8.75 0.50 spread U.S. 3-year dollar swap 8.00 0.50 spread U.S. 5-year dollar swap 7.50 0.50 spread U.S. 10-year dollar swap 0.25 0.00 spread U.S. 30-year dollar swap -26.50 0.00 spread (Reporting by Karen Brettell; Editing by Bernadette Baum and Chizu Nomiyama)