Yields rise as stocks firm, investors look ahead to US jobs report

NEW YORK: US 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 US 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 US 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.

US 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.