NEW YORK, July 2 (Reuters) - Benchmark 10-year Treasury

yields dipped Tuesday ahead of a closely-watched reading of the

jobs market and an expected speech by Federal Reserve Chair

Jerome Powell.

Yields rose Monday to their highest levels since May as

investors priced in the increasing possibility that former

President Donald Trump will prevail in the November presidential

elections. Trump, who was widely seen as winning last week's

debate against President Joe Biden, was further bolstered Monday

when the U.S. Supreme Court ruled that he has broad immunity

from prosecution, making it improbable that he will be tried

before the election on charges brought by Special Counsel Jack

Smith.

"The price action has its grounding in forward inflation and

issuance expectations in the event of a Trump victory in

November, as well as the perceived increase in the probability

of such an outcome," said Ian Lyngen, Head of U.S. Rates

Strategy at BMO Capital Markets.

The yield on the benchmark U.S. 10-year Treasury note

fell 4.7 basis points to 4.432%. The yield on the

30-year bond fell 4.2 basis points to 4.601%.

The two-year U.S. Treasury yield, which typically

moves in step with interest rate expectations,

fell 3.9 basis points to 4.733%.

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 negative 30.3 basis points, leaving it

near its least-inverted position since May.