TREASURIES-Yields climb as Trump tariff announcements draw near

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Private payrolls exceed expectations, ADP report shows

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Factory orders rise slightly, likely due to pre-tariff rush

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Trump's tariff plans raise concerns of economic slowdown

(Updates to afternoon US trading)

By Chuck Mikolajczak

NEW YORK, April 2 (Reuters) - U.S. Treasury yields reversed declines to rise on Wednesday after economic data on the labor market and manufacturing, as investor focus turned to anticipated tariff announcements from the Trump administration. Private payrolls increased by 155,000 jobs last month, above the 115,000 estimate of economists polled by Reuters, after an upwardly revised 84,000 rise in February, the ADP National Employment Report showed on Wednesday.

The data came ahead of Friday's key government payrolls report, although the ADP number is usually not predictive of the Labor Department's report. The Commerce Department reported that factory orders rose 0.6%, just above the 0.5% estimate, after an upwardly revised 1.8% rebound in January, likely due to front-loaded orders by businesses ahead of tariffs.

U.S. President Donald Trump has kept the world guessing on the details of his tariff plans, which were still being formulated ahead of a White House Rose Garden announcement ceremony scheduled for 4 p.m. Eastern Time (2000 GMT).

Appetite for safe-haven assets such as U.S. Treasuries and gold has risen in recent weeks while riskier assets such as stocks have struggled over concerns Trump's tariffs will spark a global economic slowdown and stoke inflation.

The 10-year yield closed out March with its third straight monthly decline and fell for the past three sessions.

"They could be becoming a little bit overbought for the time being," said Robert Tipp, chief Investment Strategist and head of global bonds at PGIM Fixed Income in Newark, New Jersey.

"Do I think this rally is over? If past is prologue, I'm not supposed to be surprised to see this rally go to 3.8% or even 3.6% because we're going to see possibly higher tariffs put on here and then some protracted chaotic period of negotiations."

The yield on the benchmark U.S. 10-year Treasury note rose 5.1 basis points to 4.207% after hitting a fresh one-month low of 4.11% earlier in the session.

The 30-year bond yield advanced 4.6 basis points to 4.561% after dropping to 4.466%, its lowest since March 4. A closely watched part of the U.S. Treasury yield curve measuring the gap between two- and 10-year Treasury notes , seen as an indicator of economic expectations, was at a positive 29.1 basis points. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, climbed 5.1 basis points to 3.914%. Markets are pricing in about 68 basis points of interest rate cuts by the end of the year, LSEG data showed, although comments by some Federal Reserve officials have suggested the Fed will be deliberate in adjusting rates lower. On Tuesday, Chicago Federal Reserve Bank President Austan Goolsbee said while the "hard" data shows the underlying U.S. economy is solid, the labor market strong, and inflation down from its peak in 2022, a broad new set of tariffs under Trump could lead to renewed inflation or an economic slowdown. The breakeven rate on five-year U.S. Treasury Inflation-Protected Securities (TIPS) was last at 2.582% after closing at 2.586% on April 1.

The 10-year TIPS breakeven rate was last at 2.333%, indicating the market sees inflation averaging about 2.3% a year for the next decade.

(Reporting by Chuck Mikolajczak; Editing by Richard Chang and Deepa Babington)