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NEW YORK, July 9 (Reuters) - U.S. Treasuries yields rose modestly on Wednesday as traders prepared to make room for $21 billion in 10-year note supply and awaited possible clues on the timing on a rate increase from the Federal Reserve's minutes of its June meeting.
The bond market pulled back after rallying on Tuesday due to stock market losses on worries about corporate earnings, overseas trade data as well as the intensified fighting between militants in Gaza and the Israeli military.
"It's a tug-of-war between the lift-off date and reacting to Europe and asset allocation," said Justin Lederer, Treasury strategist at Cantor Fitzgerald in New York.
Expectations that the European Central Bank might engage in more stimulus to help its struggling economy have also fed demand for Treasuries that are yielding more than German Bunds.
Bids for higher-yielding U.S. bonds faded in overseas trading as U.S. stock index futures stabilized in the wake of better-than-expected results from aluminum producer Alcoa Inc late Tuesday.
The benchmark 10-year Treasuries yield last traded at 2.577 percent, up 1 basis point from Tuesday, while the yield on 30-year bonds edged up fractionally to 3.385 percent.
The yield on three-year notes climbed above 1 percent for the first time since May 2011 and last traded at 1.015 percent.
In the absence of significant U.S. data, traders will look for hints in the records of last month's meeting of the Federal Open Market Committee, the central bank's policy-setting group, to gauge whether it will hold short-term rates near zero at least into the second half of 2015.
Last week's payrolls report showed a hefty gain of 288,000 jobs in June but also indicated wage growth was stuck in a sluggish 2 percent annual pace. Analysts said that was below policymakers' targets and supported the view the Fed would consider raising rates shortly after it stops buying bonds by year-end.
The Fed will release the FOMC minutes on its June 17-18 policy meeting at 2 p.m. EDT (1800 GMT).
About an hour before the minutes, the Treasury Department will hold the second part of this week's $61 billion fixed-rate debt supply.
The second reopening of the 10-year issue introduced in May was on track to sell at its lowest yield since June 2013. In the "when-issued" market, traders expected the latest 10-year supply to fetch a yield of 2.576 percent.
The Treasury will complete this week's note offerings with a $13 billion reopening of an older 30-year bond on Thursday . (Editing by Jeffrey Benkoe)