TREASURIES-Yields briefly hit highs on U.S. services price rise

* Data shows prices for services rose 0.3 percent last month

* 3-, 2-year yields briefly hit roughly one-month highs

* Traders await Fed statement Wednesday

* Treasury to sell $12 billion in 30-year bonds at 1 p.m. ET

NEW YORK, June 13 (Reuters) - Short-dated U.S. Treasury yields briefly hit multi-week highs on Tuesday after data showing rising U.S. services prices and as traders awaited more supply, while caution ahead of Wednesday's Federal Reserve statement prevented the move from gaining traction. The Labor Department said prices for services rose 0.3 percent last month, driven by a 1.1 percent surge in the index for final demand trade services, which measures changes in margins received by wholesalers and retailers. U.S. three-year Treasury yields hit 1.511 percent, their highest since May 16, while two-year yields touched their highest in a month of 1.367 percent after the data. Yields eased from their session highs and were last roughly unchanged from their levels as of late Monday, with three- and two-year yields last at 1.500 percent and 1.359 percent, respectively. Traders likely viewed the services price data as a harbinger of stronger May consumer price index data, which is set for release Wednesday, said John Herrmann, director of interest rates strategy at MUFG Securities in New York. That potential inflation pickup would come after recent readings showing inflation moving away from the Fed's 2 percent goal, which have been viewed as a potential obstacle to more hawkish Fed policy. The Fed is scheduled to release its decision at 2 p.m ET (1800 GMT) on Wednesday at the conclusion of its two-day policy meeting. Fed Chair Janet Yellen is due to hold a press conference a half hour later. The Fed is widely expected to raise its benchmark interest for the second time this year.

Herrmann of MUFG also said yields were pressured a bit higher given the risk that the Fed could provide more detail on its plans to shrink its bond portfolio. "The markets have to build in a little bit of risk that the Fed may say something about tapering tomorrow," he said. The Treasury will sell $12 billion in 30-year bonds on Tuesday at 1 p.m. ET (1700 GMT). U.S. 30-year yields were last at 2.866 percent, compared to 2.868 percent late Monday. Long-dated yields earlier hit 2.886 percent, their highest since June 1. "Some of (the earlier move higher in yields) is just ahead of the supply," said Justin Lederer, an interest rate strategist at Cantor Fitzgerald in New York. Benchmark 10-year Treasuries were last up 1/32 in price to yield 2.207 percent, compared to 2.213 percent late Monday.

June 13 Tuesday 11:03AM New York / 1503 GMT Price

US T BONDS SEP7 154-2/32 0-3/32 10YR TNotes SEP7 126-92/256 0-8/256 Price Current Net Yield % Change


Three-month bills 0.9925 1.0088 0.003 Six-month bills 1.1125 1.1343 0.005 Two-year note 99-202/256 1.3592 0.000 Three-year note 100 1.5 -0.002 Five-year note 99-222/256 1.778 0.000 Seven-year note 99-224/256 2.0193 -0.003 10-year note 101-124/256 2.2074 -0.006 30-year bond 102-176/256 2.8656 -0.002


Last (bps) Net

Change (bps)

U.S. 2-year dollar swap 19.75 0.75


U.S. 3-year dollar swap 17.50 -0.25


U.S. 5-year dollar swap 7.75 0.75


U.S. 10-year dollar swap -5.00 0.75


U.S. 30-year dollar swap -43.25 0.75


(Reporting by Sam Forgione; Editing by Andrea Ricci)