TREASURIES-U.S. 10-yr yield near 3-mth low after tepid ADP data

SINGAPORE, April 4 Wed Apr 3, 2013 11:13pm EDT

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SINGAPORE, April 4 (Reuters) - The U.S. 10-year Treasury yield hovered near a three-month low in Asia on Thursday, after tepid private sector jobs data dampened hopes for strong numbers from Friday's labour market report.

* Ten-year notes rose 3/32 in price to yield about 1.806 percent. The 10-year yield slipped roughly 1 basis point from late U.S. trade, approaching Wednesday's low near 1.797 percent, its lowest level since early January.

* The 10-year yield fell after payroll processor ADP reported on Wednesday that U.S. private-sector employers added 158,000 jobs in March, fewer than expected. Separately, the Institute for Supply Management reported that growth in the U.S. services sector slowed in March to the lowest level in seven months.

* The recent drop in the 10-year Treasury yield might stall near current levels of around 1.8 percent, as long as there is no severe increase in investor worries about the euro zone's debt crisis, and if U.S. jobs data on Friday shows a rise in nonfarm payrolls of around 200,000, said Hiroki Shimazu, bond strategist for SMBC Nikko Securities in Tokyo.

U.S. jobs data on Friday is expected to show a rise in nonfarm payrolls of 200,000 for March, according to a Reuters poll that was conducted before the release of the ADP survey.

"That would suggest that the pace of improvement in the labour market will probably continue at a pace faster than what was seen last year," Shimazu said.

In addition, while there are lingering worries about the euro zone including political uncertainty in Italy, the European Central Bank's pledge to buy struggling euro zone members' bonds if necessary under its still unused Outright Monetary Transactions (OMT) programme, will probably help keep financial markets relatively calm, Shimazu added.

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