(Updated in New York afternoon time)

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Yields fall as economic data weakens

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GDP on Wednesday, payrolls on Friday next data focuses

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Treasury to release refunding details on Wednesday

By Karen Brettell

April 29 (Reuters) - Benchmark 10-year U.S. Treasury

yields fell for the sixth consecutive day to a three-week low on

Tuesday after data showed that U.S. job openings dropped sharply

in March while consumer confidence hit an almost five-year low.

Job openings, a measure of labor demand, decreased 288,000 to

7.192 million by the last day of March though a decline in

layoffs suggested that the labor market remained on solid

footing.

U.S. consumer confidence slumped in April as growing concerns

over tariffs weighed on the economic outlook.

"The data just generally is getting weaker," said Tom di

Galoma, managing director at Mischler Financial Group. "That's

one of the main reasons why the markets are pointing towards

lower rates."

Investors are focused on data this week for guidance on the

health of the economy, with weaker readings likely boosting bets

that the Federal Reserve is closer to cutting rates.

Friday's jobs report for April is expected to show that

employers added 130,000 jobs during the month. The advance

estimate of gross domestic product for the first quarter due on

Wednesday is also expected to show a sharp slowdown to 0.3%,

from 2.4% in the fourth quarter.

The U.S. trade deficit in goods widened to a record high in

March as businesses ramped up efforts to bring in merchandise

ahead of Trump's tariffs, suggesting trade was a large drag on

economic growth in the first quarter.

Fed funds futures traders are pricing in 65% odds of an

interest rate cut by June, according to the CME Group's FedWatch

Tool. Fed officials are in a blackout period ahead of the May

6-7 meeting, when traders see only an 8% chance of a rate cut.

Falling commodity prices, including oil, may also make it

more likely that the U.S. central bank is closer to cutting

rates.

"Oil is dropping and commodities just generally seem to be

dropping and I think that that's a favorable outlook for

inflation," di Galoma said.

The yield on benchmark U.S. 10-year notes was

last down 3.5 basis points at 4.181%, the lowest since April 8.

The 2-year note yield, which typically moves in

step with interest rate expectations, fell 2.1 basis points to

3.664% and reached 3.648%, the lowest since April 7.

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

was last at 51.5 basis points.

Market participants remain nervous about the impact of

tariffs, though the market has stabilized from a sharp selloff

earlier this month after U.S. President Donald Trump announced

larger than expected levies on trading partners.

Most of these increases have been delayed until July 9 and

investors are hopeful that the U.S. will reach trade deals

before the pause period lapses.

Trump will sign an order on Tuesday giving automakers building

vehicles in the U.S. relief from part of his new 25% vehicle

tariffs to allow them time to bring parts supply chains back

home, Commerce Secretary Howard Lutnick said.

Lutnick also said that Trump's administration has reached one

trade deal already and is waiting for approvals from that

country before announcing it.

U.S. Treasury Secretary Scott Bessent said on Tuesday that China

could lose 10 million jobs quickly due to tariffs and that

Beijing will see over time that Chinese tariffs are not

sustainable.

The Treasury is expected to keep auction sizes steady when it

announces its refunding plans for the coming quarter on

Wednesday. Traders will focus on any guidance about future

auction size increases.