TREASURIES-U.S. yields dip as traders await U.S.-China talks progress

* Traders on edge over latest round of U.S.-China trade talks

* U.S. jobless claims fall to 49-year low last week

* U.S. to sell $78 bln in 3-, 10-, 30-year debt

* Fed's Mester, Harker not shunning chances of a U.S. rate hike

(Updates market action, adds quote, graphic) NEW YORK, April 4 (Reuters) - U.S. Treasury yields slipped modestly on Thursday, below 1-1/2-week highs, as traders awaited a possible breakthrough in the latest round of trade negotiations between China and the United States. A deal between the world's two biggest economies would remove a concern that has been hanging over financial markets since the two nations imposed tariffs on each other last year. President Donald Trump will meet Vice Premier Liu He, who is leading the Chinese side, in the Oval Office at 4:30 p.m. (2030 GMT), the White House said. "It's definitely heading in the right direction," said Eric Souza, senior portfolio manager at SVB Asset Management in San Francisco. In late U.S. trading, yields on benchmark 10-year Treasury notes were 2.513%, down marginally from late on Wednesday. They hit a 1-1/2-week peak of 2.528% in the previous session. Global bond yields have risen this week on encouraging economic data, in particular from China. Data on the United States and Europe, on the other hand, have been mixed, stoking worries over a global economic slowdown. Earlier Thursday, German industrial orders recorded their steepest decline in over two years in February, while U.S. jobless claims fell to a 49-year low last week.

The U.S. jobs market has remained resilient even as housing, manufacturing and other areas of the economy have wobbled since late 2018 due to trade worries and weakening overseas demand. The U.S. Labor Department will release its payrolls report for March at 8:30 a.m. (1230 GMT). Analysts polled by Reuters forecast U.S. employers likely hired 180,000 workers last month, stronger than the 20,000 they added in February, with the unemployment holding steady at 3.8%. They are also looking for wages to grow a 0.3% clip in March, a tad slower than the 0.4% pace the month before. Meanwhile, Philadelphia Federal Reserve President Patrick Harker and Cleveland Fed chief Loretta Mester spoke about the economy at separate events. Neither is a voting member of the Federal Open Market Committee in 2019. Harker said he expected the Fed would "at most" hike interest rates once in 2019 and once in 2020 if current conditions remain intact. U.S. rates may need to move "a bit higher" if the economy performs as expected, Mester said. On the supply front, the U.S. Treasury Department said it will sell a combined $78 billion in three-, 10- and 30-year bonds next week.

Thursday, April 4, at 1508 EDT (1908 GMT): Price

US T BONDS JUN9 147-20/32 4/32 10YR TNotes JUN9 123-136/256 1/32 Price Current Net Yield Change (pct) (bps) Three-month bills 2.38 2.4277 -0.009 Six-month bills 2.385 2.4542 0.000 Two-year note 99-212/256 2.339 0.006 Three-year note 100-58/256 2.2947 0.003 Five-year note 99-24/256 2.3185 -0.001 Seven-year note 98-248/256 2.4112 -0.005 10-year note 100-248/256 2.5133 -0.004 30-year bond 101-136/256 2.9227 -0.006 YIELD CURVE Last (bps) Net

Change (bps)

10-year vs 2-year yield 17.30 -1.15 30-year vs 5-year yield 60.40 -0.15


Last (bps) Net

Change (bps)

U.S. 2-year dollar swap 10.75 -0.25


U.S. 3-year dollar swap 8.00 0.25


U.S. 5-year dollar swap 4.00 0.25


U.S. 10-year dollar swap -2.00 0.25


U.S. 30-year dollar swap -25.25 0.50


(Reporting by Richard Leong; Editing by Bernadette Baum and James Dalgleish)