TREASURIES-US yield rise amid rate cut uncertainty, Meta bond deal

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Fed's Powell says December rate cut not guaranteed

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US Treasury yields rise amid lower rate-cut odds

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Government shutdown's effect on data may affect policy

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Meta $30 billion bond sale attracts strong investor demand

(Updates bond yields, adds quotes and Meta corporate bond issuance)

By Tatiana Bautzer

NEW YORK, Oct 30 (Reuters) - U.S. Treasury yields continued to rise on Thursday as markets saw lower odds of another Federal Reserve interest rate cut in December and amid a huge corporate bond deal from Meta Platforms (META) that has spurred selling of Treasuries for hedging purposes.

Fed Chair Jerome Powell comments on Wednesday about another interest rate cut in December not being a "foregone conclusion" caught markets off guard, and lowered the odds on easing for that month.

Investors flocked to large new corporate bond issues, such as Meta Platforms' (META) $30 billion offered on Thursday.

"There was a very large demand for the bonds, up to four times the total, and that contributed to higher yields seen on Treasuries," said Lou Brien, market strategist at DRW Trading in Chicago.

Meta's spending on AI disappointed the stock market, but the company was very successful in its bond offering with maturities ranging from 5 years to 30 and 40 years. The spread over Treasuries ranged from 50 basis points in the 5-year bond to 110 basis points in the 40-year, according to IFR News.

Wall Street dealers typically look to lock in borrowing costs for corporate bonds they are underwriting. As part of that process, a dealer sells Treasuries as a hedge to lock in the borrowing cost on the bond issue before the deal is completed.

The yield on the benchmark U.S. 10-year Treasury note rose 3.5 basis points to 4.093%.

Investors also worried about how the extended U.S. federal government shutdown, now on its 30th day, may affect future monetary policy, considering the lack of U.S. macroeconomic data.

The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, rose 2.6 basis points to 3.612%.

"We may have another month in which labor market data will not be collected if the government shutdown does not end soon," said Guy LeBas, chief fixed income strategist at Janney Capital Management in Philadelphia. "We expect to have private data available, but it's not clear how the Fed will consider it".

The odds for a rate cut at the Fed's December 9-10 meeting are still quite high, 72% according to CME's FedWatch tool, despite the lack of data, LeBas added. The reduction of import tariffs on products coming from China to the U.S. also may help reduce pressures, he added.

A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at a positive 47.7 basis points, a little higher than on Wednesday.

The European Central Bank, meanwhile, kept interest rates unchanged for the third meeting in a row on Thursday and offered no hints about future moves as it enjoys a rare period of low inflation and steady growth, even in the face of trade turbulence. (Reporting by Tatiana Bautzer; Editing by Paul Simao, Gertrude Chavez-Dreyfuss and Diane Craft)