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Treasuries Rise as Jobs Gain Forecast Made Yields Attractive

April 3 (Bloomberg) -- Treasuries rose, pushing 10-year yields down from almost the highest levels since January, amid speculation that a report tomorrow forecast to show faster U.S. employment growth drove the market down too much.

Benchmark 10-year notes gained for the first time in three days as reports showed the nation’s trade deficit unexpectedly widened in February and initial claims for unemployment insurance rose more than estimated last week. U.S. debt fell yesterday as forecasters predict the jobs report may help convince the Federal Reserve to increase interest rates next year.

“We are seeing a little give-back today as a pretty optimistic outlook for the labor market report has been priced into the market,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia.

The U.S. 10-year yield fell two basis points, or 0.02 percentage point, to 2.79 percent at 11:06 a.m. in New York, according to Bloomberg Bond Trader prices. The 2.75 percent note due February 2024 rose 5/32, or $1.56 per $1,000 face amount, to 99 22/32. The yield reached 2.82 percent on March 7, the highest since Jan. 23.

The U.S. economy added 200,000 jobs last month, versus 175,000 in February, a survey shows before the Labor Department releases the figures tomorrow. The unemployment rate fell to 6.6 percent from 6.7 percent, matching the lowest level since 2008, according to a separate survey.

To contact the reporters on this story: Cordell Eddings in New York at ceddings@bloomberg.net; Daniel Kruger in New York at dkruger1@bloomberg.net To contact the editors responsible for this story: Dave Liedtka at dliedtka@bloomberg.net Paul Cox, Greg Storey

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