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Bond prices slip with eyes on Greece before payrolls

U.S. Treasurys prices fell on Thursday as traders pared bond holdings ahead of the January payrolls report, though market losses were limited due to tension between Greece and its euro zone partners in their debt negotiation.

Another solid payroll reading, coupled with a possible rebound in wage growth, will likely revive views that the Federal Reserve might consider raising interest rates as early as this summer, analysts and traders said.

``Right now it's to be as flat as possible before tomorrow's jobs report,'' said Mike Cullinane, head of Treasuries trading at D.A. Davidson in St. Petersburg, Florida.

U.S. Markets Overview: Treasurys chart

The bond market retreated following a rally late on Wednesday after the European Central Bank stunned investors by deciding to stop accepting Greek bonds as collateral to raise cash. The move stoked anxiety about the solvency of Greek banks and fears Greece might exit the euro zone bloc.

Greek Prime Minister Alexis Tsipras shot back at the European Union on Thursday. "Greece won't take orders any more, especially orders through emails,'' he said. "The Greece/euro zones situation is fluid and there doesn't seem to be a resolution anytime soon,'' Cullinane said.

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Thursday's mixed bag of domestic data on jobless claims, trade balance and productivity did little to change investors' view on the path of economic growth.

Economists polled by Reuters forecast U.S. employers likely added 234,000 workers in January, less than the 252,000 increase in December. They see the jobless rate holding at a 6-1/2 year low of 5.6 percent, and anticipate a 0.3 percent rebound in average hourly earnings following a surprise 0.2 percent drop the prior month.

Some Fed officials have raised concerns about the lack of wage increases despite an acceleration in jobs creation. They reckon this sluggish income growth has hampered overall inflation, which has been running below the Fed's 2 percent target.

Read MoreClaims point to stronger labor market

The Labor Department will release its January jobs report at 8:30 a.m. on Friday. In early trading, longer-dated yields approached the 1-1/2 week highs reached early Wednesday.

Benchmark 10-year Treasurys notes were down 20/32 in price with a yield of 1.82 percent, up 2 basis points from late on Wednesday.

The 30-year bond fell 1 25/32 in price, yielding 2.43 percent, up 3 basis points from Wednesday.