* U.S. to sell $24 billion in three-year debt at 1 p.m.
* Yields underpinned by bets on Fed rate hike next week
By Richard Leong
NEW YORK, March 7 U.S. Treasury yields rose on
Tuesday, with the 30-year yield at its highest in over a month
as investors made room for this week's supply of coupon-bearing
government debt, led by $24 billion worth of three-year notes.
Investors have also reduced their bond holdings in
anticipation of an interest rate increase at the Federal
Reserve's policy meeting next week.
Following the three-year note sale, the Treasury Department
will auction $20 billion in 10-year debt on
Wednesday and $12 billion in 30-year bonds on
"It's hard to take this much duration risk before the Fed,"
said Aaron Kohli, interest rates strategist at BMO Capital
Markets in New York.
The yield on benchmark 10-year Treasury notes
was up 2 basis points at 2.511 percent, while the 30-year yield
was up nearly 2 basis points at 3.116 percent after
touching its highest level since Feb. 3, Reuters data showed.
Bond yields jumped in reaction to comments from Fed
officials, including Fed Chair Janet Yellen, which spurred
traders to raise their bets that the central bank will lift
interest rates by a quarter of a percentage point, to 0.75-1.00
percent, at its policy meeting next week.
Interest rate futures implied traders priced in an 84
percent chance the Fed will raise rates at its upcoming meeting
, unchanged from late Monday, CME Group's FedWatch
March 7 Tuesday 11:19AM New York / 1619 GMT
US T BONDS JUN7 148-22/32 -0-12/32
10YR TNotes JUN7 123-116/256 -0-36/25
Price Current Net
Yield % Change
Three-month bills 0.75 0.7619 0.010
Six-month bills 0.845 0.8604 0.010
Two-year note 99-158/256 1.3216 0.013
Three-year note 99-88/256 1.6041 0.022
Five-year note 99-56/256 2.0408 0.027
Seven-year note 98-168/256 2.3347 0.022
10-year note 97-176/256 2.5142 0.021
30-year bond 97-188/256 3.1169 0.020
DOLLAR SWAP SPREADS
Last (bps) Net
U.S. 2-year dollar swap 32.25 -0.50
U.S. 3-year dollar swap 25.50 -1.00
U.S. 5-year dollar swap 9.00 -0.75
U.S. 10-year dollar swap -4.75 -0.75
U.S. 30-year dollar swap -41.00 -0.75
(Reporting by Richard Leong; Editing by Dan Grebler)