* 30-year Treasury bond yields edge higher
* Short-dated notes stabilize on dovish Yellen comments
* Traders eye Friday jobs report
(Adds new prices, analyst comment)
By Sam Forgione
NEW YORK, March 31 Longer-dated U.S. Treasuries
yields edged higher on Monday on expectations for an upbeat U.S.
jobs report on Friday, while intermediate-dated notes stabilized
after dovish remarks from Federal Reserve Chair Janet Yellen.
The potential for a stronger-than-expected employment report
spurred some selling of 30-year Treasury bonds, which fell over
1 percentage point in price before trimming losses. Employers
are expected to have added 195,000 jobs in March, according to
the median estimate of economists polled by Reuters, up from
175,000 in February.
"A strong print could have a disproportionate impact on
rates, at least as a knee-jerk reaction," said Bulent Baygun,
head of US interest rates strategy at BNP Paribas, in reference
to a potential Treasury market selloff.
Baygun said that better U.S. jobs data would bolster
Yellen's remark at a press conference on March 19 that the Fed
could start raising interest rates six months after the U.S.
central bank ends its current monthly bond-buying program, which
would be earlier than expected.
Traders said that recent strong U.S. economic data on
consumer confidence, durable goods orders, and weekly jobless
claims point to an improving U.S. economic picture after frigid
temperatures hurt data at the start of the year.
The 30-year bond was last down 10/32 in price to
yield 3.56 percent. The yield on the bond was at 3.54 percent
The benchmark 10-year U.S. Treasury note was
last down 2/32 in price to yield 2.72 percent. The yield on the
note was at 2.71 percent late Friday.
The yield on the 10-year note fell 29 basis points for its
first quarterly decline since the second quarter of 2012,
according to Reuters data.
Benchmark Treasuries yields fell in the first quarter after
capital outflows from emerging market assets and weak U.S.
economic data at the start of the year spurred safe-haven bids,
and after the Fed's initial cuts to its bond-buying program in
January failed to trigger a spike higher in interest rates.
Prices on 5-year U.S. Treasury notes rebounded
from earlier losses, meanwhile, after Yellen gave a strong
defense of the Fed's easy-money policies in a speech to a
community investment conference in Chicago.
In her first public speech since becoming Fed chair two
months ago, Yellen said that the Fed's "extraordinary"
commitment to boosting the economy will be needed for some time
"(Yellen) was unequivocally more dovish," said Chris
McReynolds, head of U.S. Treasury Trading at Barclays in New
The 5-year U.S. Treasury note was last up 2/32 in price to
yield 1.72 percent. The yield on the note, which was at 1.74
percent late last Friday, fell after hitting its highest level
since early January earlier in the day.
Data on Monday also showed the pace of business activity in
the U.S. Midwest fell more than expected in March to its lowest
level since August. The Institute for Supply Management-Chicago
business barometer was 55.9, down from 59.8 in February.
Economists' median forecast in a Reuters poll was 59.0.
The data helped boost demand for intermediate-dated notes,
said Chris McReynolds, head of U.S. Treasury Trading at Barclays
in New York.
On Wall Street, all three major stock indexes rose following
Yellen's comments. The benchmark Standard & Poor's 500
stock index was last up 0.79 percent.
(Reporting by Sam Forgione; editing by Andrew Hay and Tom