April 3, 2018 / 6:29 PM / a year ago

TREASURIES-Yields rise as stocks firm, investors look ahead to U.S. jobs report

 (Adds quotes, updates prices)
    * Stronger stocks reduces bond bid
    * Friday's payroll report for March in focus
    * Fed Chair Powell to speak on Friday

    By Karen Brettell
    NEW YORK, April 3 (Reuters) - U.S. Treasury yields rose on
Tuesday as stock markets firmed and as investors looked ahead to
Friday's closely watched employment report for March.
    Yields fell to two-month lows on Monday, boosted by safety
buying as stocks tumbled.
    “I think it’s more a reversal of what we saw yesterday,”
said Subadra Rajappa, head of U.S. rates strategy at Societe
Generale in New York.
    This week’s major economic catalyst will be Friday's jobs
report, which will be watched for signs of accelerating jobs
gains and wage pressures.
    “The concern going into this week is payrolls. If we do get
another strong number I think we could start seeing some
pressure, especially because of the fact that we’ve rallied so
much in Treasuries,” Rajappa said.
    The U.S. economy added the biggest number of jobs in more
than 1-1/2 years in February, at 313,000 jobs.             
    Federal Reserve Chairman Jerome Powell is also due to speak
about the economic outlook at an event in Chicago on Friday.
    U.S. benchmark 10-year Treasury note prices             fell
14/32 in price on the day to yield 2.781 percent, after falling
as low as 2.717 percent on Monday, the lowest since Feb. 6.
    With no large catalysts to drive market direction on Tuesday
traders were focused on Friday's events.
    "Things are ranging a little bit ahead of payrolls and
Powell on Friday," said Gennadiy Goldberg, an interest rate
strategist at TD Securities in New York. 
    Hedging of corporate debt deals was also seen weighing on
bond prices.
    "There are some deal pricings going on in the market and it
might be rate locking for those," said Goldberg.

 (Editing by Lisa Shumaker)
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