(Corrects Fed's bond purchase amount and maturities in bullet
point and 2nd to last paragraph)
* Traders focus on weak details in June jobs report
* U.S. to sell $61 bln coupon-bearing debt this week
* Fed to buy $2.50-$3.25 bln bonds due 2021-2024
* Fed to offer 7-day term deposit at 0.30 percent
By Richard Leong
NEW YORK, July 7 Longer-dated U.S. Treasuries
yields slipped on Monday on buying supported by the view the
recent acceleration in job gains is not enough to spur the
Federal Reserve to raise short-term interest rates earlier than
While Thursday's government payrolls report showed a robust
288,000 increase in hiring in June and the jobless rate fell to
a six-year low at 6.1 percent, some traders concluded the labor
market still has plenty of slack with the historically low
worker participation rate and a slow rate of wage growth that
will hold back any pickup in consumer spending.
"It wasn't as good as the numbers first looked," said Larry
Milstein, head of government and agency trading at R.W.
Pressprich & Co. in New York.
This labor backdrop together with relatively muted inflation
should allow Fed policy-makers to leave U.S. short-term rates
near zero at least into the second half of 2015, analysts said.
Benchmark Treasuries yields initially jumped to two-month
peaks early Thursday on the June jobs data before ending the
session mildly higher on doubts whether the Fed would push up
its timing for a rate hike.
The U.S. bond market was closed on Friday for the U.S.
Independence Day holiday.
On the open market, the yield on 10-year Treasuries notes
was last at 2.634 percent, over 1 basis point from
late on Thursday when it traded as high as 2.692 percent.
While overseas demand emerged to help push longer-dated
yields lower, shorter-dated yields hovered close to their
Thursday's closing levels with two-year yields near
their nine-month high at 0.520 percent.
Expected foreign appetite for higher-yielding U.S. bonds,
analysts say, should stoke bids for this week's $61 billion
worth of fixed-rate Treasuries supply: $27 billion in three-year
notes on Tuesday ; $21 billion in 10-year debt on
Wednesday and $13 billion in 30-year bonds on
"This will put a cap on how high Treasuries yields will go,"
While it remains uncertain when the Fed will raise interest
rates, it is widely expected the Fed will stop its third round
of quantitative easing before year-end. On Monday, it will buy
$2.50 billion to $3.25 billion in Treasuries due in 2021 to 2024
at 11 a.m. (1500 GMT).
It will also offer banks to seven-day term deposits at an
interest rate of 0.30 percent. This policy tool is aimed to
reduce reserves from the banking system when the Fed decides to
(Reporting by Richard Leong; Editing by Chizu Nomiyama)