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TREASURIES-Yields rise on renewed optimism for U.S.-China trade deal

By Karen Brettell

* Trade hopes boost risk appetite * Treasury to sell $19 bln 30-year bonds By Karen Brettell NEW YORK, Nov 7 (Reuters) - U.S. Treasury yields rose to eight-week highs on Thursday as renewed optimism that the United States and China will reach a deal to de-escalate their trade war boosted risk appetite and reduced demand for safe-haven bonds. China and the United States have agreed to cancel in phases the tariffs imposed during their months-long trade war, the Chinese commerce ministry said on Thursday, without specifying a timetable. An interim U.S.-China trade deal is widely expected to include a U.S. pledge to scrap tariffs scheduled for Dec. 15 on about $156 billion worth of Chinese imports, including cellphones, laptop computers and toys. “Global markets in general are looking towards where trade goes,” said Justin Lederer, an interest rates strategist at Cantor Fitzgerald in New York. “The market is being dictated by headlines and it's risk on, risk off.” Benchmark 10-year notes fell 23/32 in price to yield 1.890%, the highest since Sept. 16, and up from 1.821% late Wednesday. The yields have risen from 1.67% on Friday on optimism over a trade deal, and after data showed that job growth slowed less than expected in October while wages rose. The Treasury Department will sell $19 billion in 30-year bonds on Thursday, the final sale of $84 billion in new coupon-bearing supply this week. The government sold $27 billion in 10-year notes on Wednesday to strong demand and $38 billion in three-year notes on Tuesday to solid demand. Investors are also watching economic data for further clues on whether the Federal Reserve is likely to make further interest rate cuts. The U.S. central bank cut rates last week for the third time this year and indicated that additional rate decreases may be unlikely in the near term. New York Federal Reserve President John Williams said on Wednesday that any changes in rates from here on will depend on economic data. The next major U.S. economic release will be consumer price data for October released next Wednesday. (Reporting by Karen Brettell; editing by Jonathan Oatis) )