(Updated at 14:50 EDT)

By Karen Brettell

Oct 25 (Reuters) - U.S. Treasury yields edged higher on

Friday as investors awaited employment data next week for fresh

clues on the likely path of Federal Reserve interest-rate cuts,

and next month's U.S. elections.

Ten-year yields reached a three-month high on Wednesday as

traders price in a less dovish Fed due to solid economic data,

including a much-stronger-than-expected jobs report for

September.

Next Friday's jobs report for October is the next major U.S.

economic focus. It is expected to show that employers added

123,000 jobs during the month, according to economists polled by

Reuters.

Markets are anxious over another strong jobs report, said

Stephen Gola, head of U.S. Treasuries sales and trading at

StoneX Group in New York.

"Between that and the election, I think that's probably been

(applying) the pressure on the markets."

Gola also noted that October is typically a bearish month

for bonds.

Strong economic releases mean that "the 10-year Treasury

yields don't have a good reason to gap lower," said Padhraic

Garvey, regional head of research, Americas, at ING in New York.

Soft jobs data going forward, however, could cause yields to

turn back lower, Garvey said.

Traders are pricing in 75% odds of 25-basis-point cuts at

the Fed's November and December meetings, according to the CME

Group's FedWatch Tool.

Benchmark 10-year note yields were last up 2.4

basis points at 4.226% after reaching 4.26% on Wednesday, the

highest since July 26. The yields are on track for the largest

monthly basis-point increase since April.

U.S. two-year yields, which track rate-move

expectations, gained 2.8 basis points to 4.094%.

The yield curve between two-year and 10-year yields

was little changed at 13 basis points.

Betting markets show greater odds that Republican Donald

Trump will win the U.S. presidency on Nov. 5, along with a

Republican majority in the Senate and House of Representatives.

Data on Friday showed that U.S. consumer sentiment climbed

to a six-month high in October, with the uptick most pronounced

among Republicans who grew more confident in a Trump victory.

The U.S. budget deficit is expected to worsen under either

Trump or Democratic candidate Vice President Kamala Harris and

an increase in government spending would likely lead to more

Treasury issuance.

Trump's policies on tariffs and illegal immigration are also

expected be inflationary.

Longer term, concerns about the deficit and rising Treasury

supply is likely to weigh on bonds.

"I do feel there's a mood in the marketplace now that once

we've had that election result, what about the deficits? What's

the plan there? Because it can't be left to its own devices,"

said Garvey.

The U.S. Treasury is due to give its updated borrowing

estimates for the coming two quarters next week.