(Recasts, updates yields, adds analyst comments, October jobs data, and next week's supply) Nov 6 (Reuters) - U.S. Treasury yields climbed higher on Friday, lifted by better-than-expected October employment data, while the market kept a close eye on the latest election developments that showed Democrat Joe Biden with slight leads in two undecided states. The benchmark 10-year yield was last up 5.2 basis points at 0.8303%, while the 30-year yield jumped 6.5 basis points to 1.6096%. The October unemployment rate fell to a lower-than-expected 6.9% from 7.9% in September, although a 638,000 increase in nonfarm payrolls was the smallest gain since a jobs recovery started in May. "It raises prospects for fourth quarter growth," said Michael Englund, chief economist at Action Economics in Boulder, Colorado. "It's clearly a good sign for the economy, so it would put upward pressure on yields." On the election front, Biden took a narrow lead over Republican President Donald Trump in Georgia and Pennsylvania on Friday, putting the White House within his reach as vote counts continued in a handful of undecided states. Yields have been on a roller-coaster ride this week. The market, which had positioned for a Democratic sweep in Tuesday's national elections, has recalibrated for a split government scenario that would likely result in a smaller stimulus plan to aid the coronavirus-battered economy, although potential runoffs in Georgia could determine which party controls the U.S. Senate. The coming week will bring a burst of supply with $54 billion of three-year notes offered on Monday, $41 billion of 10-year notes on Tuesday and $27 billion of 30-year bonds on Thursday. Jim Caron, portfolio manager at Morgan Stanley Investment Management, said it was hard to see bond yields move materially higher. "As more supply comes into the market, if you can buy things a little bit cheap, you're going to do it," he said. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes steepened. It was last up 5.6 basis points at 67.20 basis points. It had widened to as much as 77 basis points on Wednesday. November 6 Friday 10:13AM New York / 1613 GMT Price Price Current Net Yield % Change (bps) Three-month bills 0.0925 0.0938 0.003 Six-month bills 0.0975 0.0989 0.003 Two-year note 99-240/256 0.1567 0.006 Three-year note 99-196/256 0.2052 0.013 Five-year note 99-104/256 0.3705 0.035 Seven-year note 99-68/256 0.6077 0.049 10-year note 98-20/256 0.8303 0.052 20-year bond 95-164/256 1.3777 0.061 30-year bond 94-120/256 1.6096 0.065 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 8.00 -0.25 spread U.S. 3-year dollar swap 7.75 0.00 spread U.S. 5-year dollar swap 6.25 -0.50 spread U.S. 10-year dollar swap 2.25 -0.50 spread U.S. 30-year dollar swap -33.25 -0.75 spread (Reporting by Karen Pierog in Chicago and Dhara Ranasinghe in London; Editing by Catherine Evans and Jonathan Oatis)
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