TREASURIES-Bonds firm before heavy data week, debt ceiling in focus

    * Economic data this week includes August jobs report
    * Treasury to auction 2-year, 5-year notes on Monday
    * Debt ceiling concerns weigh on some Treasury bills

    By Karen Brettell
    NEW YORK, Aug 28 (Reuters) - U.S. Treasuries were steady on
Monday as market participants waited on data that will culminate
in Friday’s August employment report for further indications of
the strength of the U.S. economy.
    The employment report is expected to show solid jobs gains,
but wage data will be the main focus of any uptick in inflation.
    “If we got a crazy average hourly earnings number, that
would jolt the market, but we’re not expecting that to happen,”
said Praveen Korapaty, head of global interest rate strategy at
Credit Suisse in New York.
    The median estimate of 60 economists polled by Reuters shows
employers added 182,000 jobs in August.         
    Other releases this week include second-quarter gross
domestic product data on Wednesday and personal income figures
on Thursday.
    Benchmark 10-year notes             were last down 2/32 to
yield 2.18 percent, up from 2.17 percent on Friday.
    The prospect of a government shutdown and even a default is
also in focus as lawmakers face a deadline to raise the U.S.
debt ceiling by late September or run out of funds.
    “The most interesting thing will be what’s happening on the
legislative side in the U.S.,” said Korapaty. “It’s not clear to
me that the debt ceiling legislation will have smooth sailing,
and certainly the odds of a government shutdown are higher than
what markets seem to be worried about at this point.”
    Yields on Treasury bills that are due on Oct. 5             
were elevated on Monday at 1.14 percent but below the high of
1.24 percent reached on Aug. 10.
    The U.S. Treasury Department, meanwhile, will sell $88
billion in short- and intermediate-dated debt this week,
including two auctions on Monday.
    The government will sell $26 billion in two-year notes and
$34 billion in five-year notes on Monday, followed by a $28
billion auction of seven-year notes on Tuesday.

 (Reporting by Karen Brettell; Editing by Lisa Von Ahn)
Our Standards:The Thomson Reuters Trust Principles.

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