April 5, 2018 / 6:17 PM / a year ago

TREASURIES-Yields climb as easing trade fears boosts risk appetite

 (Adds quote, updates prices)
    * U.S. willingness to negotiate on trade lifts equities
    * U.S. payrolls data on Friday in focus

    By Karen Brettell
    NEW YORK, April 5 (Reuters) - U.S. Treasury yields rose to
one-week highs on Thursday as investors piled back into equities
as reduced fears of a trade war drove up the appetite for risk,
and ahead of Friday’s closely watched employment report for
    World stocks rose as the United States voiced a willingness
on Wednesday to negotiate a resolution to an escalating trade
fight with China after Beijing retaliated against proposed U.S.
tariffs on $50 billion in Chinese goods by targeting key
American imports.             
    “The trade wars aren’t escalating, at least not right now,
there’s a little bit more of a risk appetite around the globe,”
said Justin Lederer, an interest rate strategist at Cantor
Fitzgerald in New York.
    Benchmark 10-year notes             fell 9/32 in price to
yield 2.821 percent, after earlier rising to 2.834 percent, the
highest level since March 27.
    The Commerce Department on Thursday reported the U.S. trade
deficit increased to a near 9-1/2-year high in February as both
exports and imports rose to record peaks, but the shortfall with
China narrowed sharply.             
    This week’s major economic catalyst will be Friday's closely
watched U.S. 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.
    Analysts noted that March’s jobs gains often disappoint. The
month was marked by several weather disruptions in densely
populated regions, which could hurt jobs growth and increase
wage pressures.
    "The rates market are much more sensitive to average hourly
earnings (AHE), and in months in which there are large numbers
of individuals out of work for weather reasons AHE tends to be
biased upwards," said Guy LeBas, chief fixed income strategist
at Janney Montgomery Scott in Philadelphia.
    According to a Reuters survey of economists, nonfarm
payrolls likely increased by 195,000 in March.
    The ADP National Employment Report on Wednesday showed
employers added 241,000 jobs in March.
    Also on Friday, Federal Reserve Chairman Jerome Powell is
due to speak about the economic outlook at an event in Chicago.

 (Editing by Leslie Adler)
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