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TREASURIES-Yields rise on jobs data as election results inch closer to Biden win

 (Recasts, updates yields, adds analyst comments, McConnell
remarks)
    By Karen Pierog
    CHICAGO, Nov 6 (Reuters) - U.S. Treasury yields rose on
Friday while the market kept a close eye on the latest election
developments that showed Democrat Joe Biden on the verge of
winning the presidency.
   The benchmark 10-year yield, which reached a
session high of 0.837%, was last up 4 basis points at 0.8185%.
The 30-year yield, which climbed as high as 1.619%,
was last up 5.2 basis points at 1.5966%.
    Biden expanded his narrow leads over Republican President
Donald Trump in Georgia and Pennsylvania, where a win would put
the Democrat over the 270 electoral votes needed to secure the
presidency.
    Jim Vogel, senior rates strategist, at FHN Financial in
Memphis, Tennessee, said greater clarity on the election helped
lift yields.
    "That took away an element of uncertainty that had perhaps 
held yields down in that mid-70's (basis point) kind of range on
(10-year notes)," he said. 
     Yields also climbed after the U.S. Labor Department's
closely watched employment report showed the unemployment rate
fell to a lower-than-expected 6.9% in October 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's clearly a good sign for the economy, so it would put
upward pressure on yields," said Michael Englund, chief
economist at Action Economics in Boulder, Colorado.
    Republican Senate Majority Leader Mitch McConnell on Friday
used the drop in the unemployment rate to bolster his argument
for a smaller stimulus package to aid the coronavirus-battered
economy.
     Yields have been on a roller-coaster ride this week. The
market, which had positioned for a Democratic sweep along with
massive stimulus spending to result from Tuesday's national
elections, later recalibrated for a split government scenario
with a slimmed-down aid plan. Meanwhile, 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. 
    "The expectation is that we'll get through them without too
much problem, and maybe a band of probably plus-5 basis points
to minus-2 basis points, somewhere around there on both (10-year
notes and 30-year bonds)," Vogel 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 4.4 basis points
at 66 basis points. It had widened to as much as 77 basis points
on Wednesday. 
November 6 Friday 3:04PM New York / 2104 GMT
                               Price Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.09         0.0913    0.000
 Six-month bills               0.1          0.1014    0.005
 Two-year note                 99-241/256   0.1547    0.004
 Three-year note               99-198/256   0.2026    0.011
 Five-year note                99-116/256   0.361     0.026
 Seven-year note               99-96/256    0.5916    0.033
 10-year note                  98-48/256    0.8185    0.040
 20-year bond                  95-212/256   1.3665    0.049
 30-year bond                  94-196/256   1.5966    0.052
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         8.25         0.00    
 spread                                               
 U.S. 3-year dollar swap         7.50        -0.25    
 spread                                               
 U.S. 5-year dollar swap         6.00        -0.75    
 spread                                               
 U.S. 10-year dollar swap        1.75        -1.00    
 spread                                               
 U.S. 30-year dollar swap      -33.00        -0.50    
 spread (Reporting by Karen Pierog in Chicago and Dhara Ranasinghe in
London; Editing by Catherine Evans, Jonathan Oatis and Tom
Brown)
  
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