(Updates with market activity, analyst comment) By Ross Kerber June 4 (Reuters) - Longer-term U.S. Treasury yields jumped on Thursday to levels not seen in months as European stimulus efforts and a slightly less grim U.S. jobs report helped support investor confidence. The benchmark 10-year yield was up 5.7 basis points in afternoon trading at 0.8184%. It touched as high as 0.822%, the most since March 27. The movement continued a risk-on trend this week and sent a closely-watched part of the yield curve higher. The European Central Bank said it would raise emergency bond purchases by 600 billion euros ($674 billion). Also the number of Americans filing for unemployment benefits dropped below 2 million last week. The morning reports helped spark a rally on Wall Street that later fizzled. But Treasury yields held their gains, showing investors starting to move money out of the government securities, said Michael Lorizio, senior fixed income trader at Manulife Investment Management. "The performance of risk assets has been so strong, you're seeing more market participants go with that move and to fund that you're seeing some Treasury sales, for sure," he said. He and others said investors will need more positive data such as for the third quarter of 2020 for yields to fully recover to pre-pandemic levels, around 2% for the 10-year note. "We know the data is bad for Q2; we'll see what Q3 brings as economies reopen," said Justin Lederer, Cantor Fitzgerald treasury analyst. The part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 62 basis points, about 7 basis points higher than Wednesday's close and the highest since March 20. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down less than a basis point at 0.196%. June 4 Thursday 2:11PM New York / 1811 GMT Price US T BONDS SEP0 174-3/32 -1-13/32 10YR TNotes SEP0 137-200/256 -0-104/2 56 Price Current Net Yield % Change (bps) Three-month bills 0.1525 0.1547 0.000 Six-month bills 0.175 0.1781 0.000 Two-year note 99-220/256 0.196 -0.004 Three-year note 99-160/256 0.253 0.003 Five-year note 99-60/256 0.4053 0.028 Seven-year note 99-16/256 0.6374 0.048 10-year note 98-40/256 0.8184 0.057 30-year bond 91-80/256 1.6172 0.066 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 7.75 0.75 spread U.S. 3-year dollar swap 4.75 0.50 spread U.S. 5-year dollar swap 3.75 0.25 spread U.S. 10-year dollar swap -1.00 0.25 spread U.S. 30-year dollar swap -48.00 0.50 spread (Reporting by Ross Kerber in Boston; editing by Jonathan Oatis and Diane Craft)
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