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TREASURIES-Upbeat private hiring data lift U.S. bond yields

* U.S. private jobs growth strongest in 9 months in Dec -ADP

* Traders raise bets on Fed interest rate hike in March

* U.S. yield curve moves near flattest level in a decade

* Wall Street gains, corporate supply also support yields

NEW YORK, Jan 4 (Reuters) - U.S. Treasury yields rose on Thursday, with two-year yields hitting a more than nine-year peak as surprisingly strong December private hiring data boosted expectations the Federal Reserve would raise interest rates at its March policy meeting. Gains on Wall Street, with the Dow breaking above the 25,000 milestone, as well as this week's corporate bond supply also put upward pressure on yields. "Today's reports should weigh upon the 10-year Treasury and boost its yield," said Stan Shipley, a strategist at Evercore ISI in New York. U.S. companies added 250,000 workers in December, marking the biggest monthly increase since March and topping the 190,000 gain forecast among analysts polled by Reuters, the ADP National Employment Report showed earlier on Thursday. The latest ADP data supported the notion of a solid payrolls report for December from the U.S. Labor Department, which is due at 8:30 a.m. (1330 GMT) on Friday. They also boosted bets in the futures market of a possible rate hike at the Fed's March 20-21 meeting. Federal funds futures implied traders saw a 73 percent chance of a quarter-point rate increase to 1.50 percent-1.75 percent in March, up from 68 percent late on Wednesday, according to CME Group's FedWatch. Perception of a possible March rate increase weighed the yield curve to near its flattest level in a decade as shorter-dated yields rose more than longer-dated ones. This curve flattener move, a popular trade in 2017, will likely persist should domestic inflation continues to undershoot the Fed's 2 percent goal even as business activity and hiring pick up after the U.S. tax overhaul enacted in December, analysts and traders said. At 10:24 a.m. (1507 GMT), the spread between five-year and 30-year Treasury yields narrowed to 52 basis points, about 1 basis point short of the flattest level in a decade set earlier this week. Benchmark 10-year Treasury yields were up nearly 4 basis points at 2.482 percent. Earlier on Thursday, the two-year yield reached 1.976 percent, the highest since October 2008, while the five-year yield touched 2.292 percent, the highest since April 2011. On Wall Street, the three major indexes set record highs in early trading, bolstered by the upbeat ADP jobs data and optimism about global economic growth. On the supply front, companies have raised $16.25 billion in the investment-grade bond market so far this week, according to IFR, a Thomson Reuters unit. January 4 Thursday 10:25AM New York / 1525 GMT Price

US T BONDS MAR8 151-23/32 -19/32 10YR TNotes MAR8 123-120/256 -10/32 Price Current Net Yield % Change

(bps)

Three-month bills 1.385 1.4091 0.005 Six-month bills 1.5675 1.6019 0.010 Two-year note 99-210/256 1.9676 0.033 Three-year note 99-126/256 2.0536 0.039 Five-year note 99-60/256 2.2883 0.042 Seven-year note 99 2.4063 0.039 10-year note 97-252/256 2.4816 0.037 30-year bond 98-196/256 2.8113 0.028 YIELD CURVE Last (bps) Net

Change (bps)

10-year vs 2-year yield 51.20 0.00 30-year vs 5-year yield 52.20 -1.80

DOLLAR SWAP SPREADS

Last (bps) Net

Change (bps)

U.S. 2-year dollar swap 17.50 -0.25

spread

U.S. 3-year dollar swap 18.50 0.00

spread

U.S. 5-year dollar swap 3.75 0.00

spread

U.S. 10-year dollar swap -1.50 0.25

spread

U.S. 30-year dollar swap -20.50 0.00

spread

(Reporting by Richard Leong; Editing by Meredith Mazzilli)