TREASURIES-Gov debt pare gains after tepid 7-yr sale

* Treasuries pare some gains after tepid 7-yr auction

* 7-year note auction prices with 1.7 bps tail

* Gov debt likely to be rangebound before Friday jobs data

(recasts, updates comment, prices)

By Karen Brettell

NEW YORK, March 30 (Reuters) – U.S. Treasuries pared gains
after a $29 billion auction of new seven-year notes saw tepid
demand, with the debt now expected to be largely rangebound
ahead of key employment data on Friday.

The new notes priced at a 1.7 basis point concession over
where the Treasuries were trading before the sale. Some of that
weakness may have been due to the market having been bid up
before the auction, analysts said. For details, see
[ID:nTAR000213]

“We didn’t see anything that said it was time to rally,”
said Jim Vogel, interest rate strategist at FTN Financial in
Memphis, Tennessee. “Its time to not to get hurt in an auction,
its not time to get aggressive or try to move in front of
people with all the money.”

Seven-year notes (US7YT=RR: Quote, Profile, Research) traded up 6/32 in price to
yield 2.87 percent, after trading as low as 2.85 percent before
the auction.

Prices had been supported earlier on Wednesday after data
from ADP Employer Services showed that private employers added
201,000 jobs in March, in line with expectations but
disappointing traders that had hoped for an even stronger
report.

Some traders are expecting non-farm payroll data released
on Friday will show that employers added more than 250,000 jobs
in March, far above the 190,000 expected by economists.

“The ADP number today although in line may have reduced
some of the bullish calls for a really strong non-farm payroll
number on Friday,” said Jason Rogan, director of U.S. Treasury
trading at Guggenheim Capital Markets in New York.

Nonetheless, “the market is still anticipating a pretty
strong nonfarm payroll number, I wouldn’t be surprised if the
market is short covering going in the next two days in front of
the number,” he added.

Two-year notes (US2YT=RR: Quote, Profile, Research) rose 2/32 in price to yield 0.81
percent, down from 0.83 percent late on Tuesday, and five-year
notes (US5YT=RR: Quote, Profile, Research) rose 5/32 in price to yield 2.23 percent, down
from 2.26 percent.

Ten-year notes (US10YT=RR: Quote, Profile, Research) rose 7/32 in price to yield 3.47
percent, down from 3.49 percent and thirty-year bonds
(US30YT=RR: Quote, Profile, Research) rose 12/32 in price to yield 4.53 percent, down
from 4.54 percent.

(Additional reporting by Ellen Freilich; Editing by Andrew
Hay)

TREASURIES-Gov debt pare gains after tepid 7-yr sale