TREASURIES-Treasury yields rise with stocks as trade war fears wane

(Recasts with stocks, trade fears easing; adds quotes, prices, table)

* Yields rise as stocks recover

* CVS expected to finance Aetna deal with $40 bln supply

(.) NEW YORK, March 5 (Reuters) - Treasuries yields rose on Monday afternoon as the U.S. stock market recovered and fears of a trade war eased after senior Republicans urged President Donald Trump to reconsider his threat to impose tariffs on imported steel and aluminum. U.S. House Speaker Paul Ryan urged the Trump administration to hold off on implementing new tariffs, citing risks to the economy. Fellow Republican Kevin Brady, the top House legislator on trade, said American consumers should not be forced to pay more for goods. President Trump nevertheless said he was not backing down on the plan, saying he did not think there would be a trade war due to the tariffs. Trump has touted the planned tariffs as a way to revive the U.S. steel and aluminum industries. "A trade war on steel and aluminum is going to help a small number of people and it's going to hurt a lot more and drive up prices, said Mary Ann Hurley, vice president, fixed income trading at D.A. Davidson in Seattle. The S&P 500 Index was up 1.2 percent from Friday's close, with the Dow Jones Industrial Average up 1.4 percent. The yield on the U.S. benchmark government bond was last at 2.884 percent, up 2.7 basis points from its last close. Trump's determination to push ahead with a 25 percent tariff on steel imports and a 10 percent duty on aluminum has prompted threats of retaliation from the European Union, Canada, China and Brazil, among others. It roiled world stock markets as investors worried that a trade war could derail global economic growth. Chinese retaliation, for example, could take the form of counter-tariffs or a central bank sell-off of U.S. Treasuries. "I dont think a trade war characterized by central bank dumping of Treasuries is really on the radar. But we could be in for a period of retaliatory industry-specific tariffs," said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets in New York. The expectation U.S. pharmacy chain CVS Health Corp would issue over $40 billion in new supply this week to fund its acquisition of health insurance company Aetna also boosted yields on Monday. Without an additional bump in demand, large issuances of debt will drive down prices of fixed-income products. "There are thoughts there is going to be rate-lock selling. The supply on the corporate end is a factor thats really hurting Treasuries," said Hurley. Yields were higher along the curve, but all traded within last week's range. U.S. 2-year Treasury yields were last at 2.244 percent. The long end was also under pressure, with 30-year yields last at 3.16 percent.


Currency bid prices at 3:29PM (2029 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change


Euro/Dollar EUR= $1.2325 $1.2317 +0.06% +2.74% +1.2365 +1.2270 Dollar/Yen JPY= 106.1700 105.7300 +0.42% -5.77% +106.2300 +105.3600 Euro/Yen EURJPY= 130.87 130.24 +0.48% -3.19% +130.9900 +129.3700 Dollar/Swiss CHF= 0.9402 0.9380 +0.23% -3.50% +0.9408 +0.9348 Sterling/Dollar GBP= 1.3836 1.3802 +0.25% +2.40% +1.3876 +1.3768 Dollar/Canadian CAD= 1.2992 1.2878 +0.89% +3.30% +1.3000 +1.2872 Australian/Doll AUD= 0.7760 0.7762 -0.03% -0.53% +0.7778 +0.7727


Euro/Swiss EURCHF= 1.1589 1.1550 +0.34% -0.86% +1.1598 +1.1512 Euro/Sterling EURGBP 0.8907 0.8921 -0.16% +0.27% +0.8951 +0.8885 NZ Dollar/Dolar NZD= 0.7222 0.7243 -0.29% +1.92% +0.7255 +0.7204 Dollar/Norway NOK= 7.8250 7.7834 +0.53% -4.65% +7.8507 +7.7614 Euro/Norway EURNOK= 9.6463 9.5895 +0.59% -2.05% +9.6664 +9.5834 Dollar/Sweden SEK= 8.2630 8.2473 +0.23% +0.75% +8.2910 +8.2366 Euro/Sweden EURSEK= 10.1867 10.1629 +0.23% +3.53% +10.1920 +10.1480

(Reporting by Kate Duguid; editing by Grant McCool and Dan Grebler)