* Russia calls for U.N. meeting on Ukraine -reports
* U.S. nonfarm payrolls rise 288,000
* U.S. 10-year yields fall to 3-month low (Recasts, updates prices, adds quote)
By Gertrude Chavez-Dreyfuss
NEW YORK, May 2 (Reuters) - Yields on U.S. 30-year bonds dropped to the lowest in more than 10 months in volatile trading on Friday after reports that Russia had called for a meeting of the United Nations Security Council over a Ukrainian army operation in the southeastern city of Slaviansk.
The drop in yields came after they had climbed to session highs following an upbeat U.S. employment report.
U.S. 30-year yields fell as low as 3.36 percent, their weakest level since June 19, 2013. U.S. 10-year note yields slid to 2.57 percent, a three-month trough, following the news on Russia and Ukraine.
The report quoted Russia’s mission to the United Nations.
“It’s all about this U.N. resolution that they’re going to meet on Ukraine. That’s really what spurred this whole thing going,” said Tom Digaloma, head of fixed income at ED&F Man in New York.
Earlier in the session, Treasuries sold off following a U.S. nonfarm payrolls figure that came in higher than expected.
Data showed that U.S. nonfarm payrolls surged by 288,000 in April, the most since January 2012, while the jobless rate dropped to a 5-1/2 year low of 6.3 percent. The headline jobs figure handily beat Wall Street’s expectations for an increase of just 210,000.
In midday trading, the benchmark 10-year U.S. Treasury note was flat on the day to yield 2.60 percent, compared with 2.62 percent late on Thursday. Yields hit session highs of 2.70 percent following the jobs number.
Prices of 30-year Treasury bonds rose 14/32 to yield 3.38 percent, from 3.41 percent the previous session.
“I still think that there is a tremendous amount of shorts in the market,” Digaloma said. “We’ve seen buyers on dips in here. I think probably this is going to continue with this thing going on in Ukraine and Russia. It’s just continuation of this flight to quality bid.” (Editing by Peter Galloway)