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* Treasuries prices gain as jobs data meets expectations
* European debt yields fall to record lows
* U.S. debt seen attractive relative to Spanish, Italian bonds
* Treasury to sell $62 bln coupon-bearing debt next week
NEW YORK, June 6 (Reuters) - U.S. Treasuries prices gained on Friday as falling yields on European bonds made U.S. debt relatively attractive, while data showed U.S. employers maintained a solid pace of hiring in May. Italian, Spanish and Irish bond yields fell to record lows a day after the European Central Bank cut all its main rates to record lows, imposed negative interest rates on overnight bank deposits and outlined a new long-term loan program for banks to promote lending to small and mid-sized businesses.
The rally in European debt pushed yields on Italian and Spanish debt closer to those offered by Treasuries, which are considered a much lower risk, making the U.S. bonds more attractive by comparison. "The ECB delivered what the market was expecting in terms of a rate cut and was on the dovish side in terms of easing policies. That is a positive for European bonds and global fixed income. With European bonds rallying, it inevitably drags U.S. rates along with it," said Michael Chang, an interest rate strategist at Credit Suisse in New York. Benchmark 10-year notes were last up 2/32 in price to yield 2.58 percent, after earlier falling as low as 2.53 percent. That compares with 10-year Spanish bond yields at 2.62 percent and Italian bond yields offering 2.73 percent. Irish government bonds paid less than comparable Treasuries for a second day, with 10-year yields dropping to 2.43 percent. Demand for higher yield may help support Treasuries even as the U.S. government sells $62 billion in new coupon-bearing supply next week, including $28 billion in three-year notes on Tuesday, $21 billion in 10-year notes on Wednesday and $13 billion in 30-year bonds on Thursday. "It's going to be hard for the Treasury market to sell off a whole lot, given where peripheral European debt is at the moment," said Dan Mulholland, managing director in Treasuries trading at BNY Mellon in New York. Treasuries also rallied after nonfarm payrolls increased by 217,000 last month, returning employment to its pre-recession level and offering confirmation the economy has snapped back from a winter slump. Economists polled by Reuters had expected employment to increase by 218,000 last month. The unemployment rate held steady at a 5-1/2 year low of 6.3 percent even as some Americans who had given up the search for work resumed their hunt. That was because there was an increase in household employment.
(Reporting by Karen Brettell, Editing by W Simon and Dan Grebler)