(Adds new comments, 7-year note auction results, updates yields)

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Yields drop after weak job openings report

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Fed expected to maintain current interest rates

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Treasury likely to maintain current auction sizes

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US 10-year, 30-year yields fall to multi-week lows

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Strong seven-year note auction pushes yields lower

By Gertrude Chavez-Dreyfuss

NEW YORK, July 29 (Reuters) -

U.S. Treasuries rose across the board on Tuesday, pushing

yields to multi-week lows, following a surprisingly sterling

seven-year note auction that quelled concerns about diminishing

demand for government debt and a weaker-than-expected report on

job openings for June, suggesting pockets of weakness in the

labor sector.

Investors were also positioning ahead of Wednesday's Federal

Reserve decision and a government announcement of its financing

plans for this quarter. While the Fed is broadly expected to

keep its benchmark overnight interest rate in the 4.25%-4.50%

range when its two-day meeting ends on Wednesday, some market

participants believe the central bank could likely signal

potential easing in September.

"There will be a robust debate of 'doves' vs. 'hawks' at

tomorrow's Fed meeting, but there won't be a 'deal with the

devil at the crossroads' to cut rates yet," wrote Thierry

Wizman, global FX and rates strategist, at Macquarie in a

research note. "Still, the 'doves' have a point about the

pockets of weakness in the U.S. economy, and the U.S.'s trade

deals undercut (Fed Chair ) Jay Powell's favorite excuse for not

easing.

In afternoon trading, the benchmark 10-year yield fell to its

lowest since July 3, and was last down nine basis points (bps)

to 4.330% US10YT=RR. The yield was on pace for its largest daily

drop since June 4. U.S. 30-year yields also dropped to their

weakest level in three weeks. They last changed hands down 9.3

bps at 4.871% US30YT=RR.

On the short end of the curve, the two-year yield, which

reflects interest rate expectations, slid 4.9 bps to 3.873%

US2YT=RR. Earlier in the session, the yield fell to a more than

one-week low.

The robust $44 billion seven-year note sale was a major

driver for Treasuries, pricing at

4.092%

, lower by roughly 2.6 bps than the expected rate at the bid

deadline, suggesting the note was snapped up by investors

without a premium. The auction saw record demand from domestic

investors of 33.7%, an all-time high in end-user demand of 96%,

and an unprecedented low uptake from primary dealers of only

4.1%. The latter was a positive sign, suggesting that the

auction was so successful and the seven-year note so in-demand

that dealers had to take in a record low share of the offering.

Earlier in the session, Treasury yields on the long end of the

curve extended their fall after data showed U.S. job openings

and hiring decreased in June, with openings falling 275,000 to

7.437 million by the last day of the month, the Labor

Department's Bureau of Labor Statistics said in its Job Openings

and Labor Turnover Survey, or JOLTS report.

Economists polled by Reuters had forecast 7.50 million

unfilled jobs.

Hiring also dropped, down 261,000 at 5.204 million in June,

undermined by persistent uncertainty about where tariff levels

will eventually settle that has left businesses hesitant to

boost hiring.

"As the Fed meets, they should take note of the drop in job

openings and the fall in quits. The labor market was solid, but

it is softening," said Brian Jacobsen, chief economist, at Annex

Wealth Management, in Brookfield, Wisconsin. "There's no reason

the Fed should flirt with recession by digging in its heels on

insisting everything is fine."

Another piece of data, on the other hand, showed that

consumer confidence rose in July, with the index increasing 2.0

points to 97.2 this month. Economists polled by Reuters had

forecast the index would increase to 95.0. The report briefly

pushed two-year yields slightly higher.

But the market's focus overall was on two key events this

week: the Fed decision and the Treasury's refunding

announcement.

"I think there will be more discussions within the committee

to lower rates," said David Norris, partner at TwentyFour Asset

Management. "There's room for rates to be lower than where they

are. There's potential because we're getting more clarity on the

impact of tariffs."

As for the Treasury's refunding, the department is widely

anticipated to keep current auction sizes for notes and bonds

for the next several quarters. Analysts said the Treasury can

afford to delay increasing the auction sizes for longer-maturity

debt given its focus on the issuance of more Treasury bills

where demand has been robust. Treasury recently ramped up

issuance of short-dated bills to replenish its cash balance,

which has shrunk to about $300 billion.

"There are major questions in the coming quarters about what

the mix of financing will be," said Lou Crandall, chief

economist, at money market research firm Wrightson ICAP in New

York. "But there's really no urgency about addressing that this

quarter. This quarter, we're going to get a lot of (Treasury)

bills."