* Treasuries give up early gains
* 30-year yield backs away from recent low
* Traders ready for Yellen testimony later in week
By Michael Connor
NEW YORK, May 5 U.S. Treasuries eased on Monday
after giving up early gains driven by global investors seeking
shelter in government bonds and other safe-haven assets from
increasing tensions in Ukraine.
Prices for 10-year notes were down 7/32 and were
yielding 2.611 percent after trading on Friday as low as 2.57
percent, a three-month trough.
On Friday, when an unexpectedly strong payrolls report was
undermined by worries about Ukraine, U.S. 30-year bond
yields fell as low as 3.34 percent, their lowest
level since June 19. But prices retreated on Monday and lifted
yields to 3.4 percent in New York.
"There's a little bid from Friday but the market is quiet
with London and Japan closed," said Kim Rupert, managing
director at Action Economics. "Escalation of tension (in
Ukraine) is keeping stocks on edge, especially in Europe and a
little bit here too."
Pro-Russian militants stormed a Ukrainian police station in
Odessa on Sunday and freed nearly 70 fellow activists, two days
after over 40 died in a blaze at a building they had occupied
after clashes with pro-Kiev groups.
European stocks were stung by the news, as well as by
economic data signalling China's growth was slowing, and slipped
in thin trade on Monday. Wall Street stocks opened lower, with
major indices off about 0.5 percent.
"We have violence in Ukraine and China's numbers are weaker.
There's a storm of information," said Ellis Phifer, market
strategist at Raymond James.
Traders were also readying for testimony before the U.S.
Congress on Wednesday and Thursday by Federal Reserve Chair
Janet Yellen that may provide clues to the central bank's
massive bond-buying program and the timing of interest rate
hikes widely expected next year.
"Yellen will be key," Phifer said. "She has moved markets at
other times she's spoken."
Yellen will make few waves that will affect trading
substantially, according to U.S. strategist Gennadiy Goldberg at
"Yellen likely (will strike) a relatively dovish tone while
maintaining an optimistic outlook on the recovery amid recent
signs of improvement," Goldberg said.
"Yellen will likely attempt to downplay any suggestions that
the Fed would hike faster than anticipated following last week's
stronger payroll report, stressing that substantial slack in the
economy and contained price pressures will leave the Fed on hold
for some time to come," Goldberg said in a written commentary.
(Reporting By Michael Connor in New York; Editing by Chizu