April 4, 2018 / 1:05 PM / 10 months ago

TREASURIES-Yields fall as trade war fears boosts demand for bonds

* Trade war concerns adds safety bid for bonds

* Friday's employment report in focus

By Karen Brettell

NEW YORK, April 4 (Reuters) - U.S. Treasury prices gained on Wednesday on safety buying after China retaliated against the Trump administration’s plan to impose tariffs on Chinese goods, hurting stock prices.

China hit back with a list of similar duties on key U.S. imports including soybeans, planes, cars, beef and chemicals.

Benchmark 10-year note prices gained 5/32 in price to yield 2.726 percent, down from 2.783 percent on Tuesday.

“It’s about the trade war and the breakdown in equities,” said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets in New York.

This week’s major economic catalyst will be Friday's closely watched jobs report, which will be evaluated for accelerating jobs gains and wage pressures.

The U.S. economy added the biggest number of jobs in more than 1-1/2 years in February, at 313,000 jobs.

March’s numbers may not be as bullish for the economy, however.

“Data for March has a very strong tendency to disappoint,” Lyngen said.

If jobs gains or wages come in below consensus on Friday 10-year yields may fall back below the 2.70 percent area to around 2.65 percent, Lyngen said.

The yields have been range-bound between 2.70 percent and 2.80 percent for the past week.

The ADP National Employment Report on Wednesday showed employers adding 241,000 jobs in March.

Federal Reserve Chairman Jerome Powell is also due to speak about the economic outlook at an event in Chicago on Friday. (Editing by Chizu Nomiyama)

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