Treasuries extend drop as pressures build on longer-dated debt

Treasuries slipped across the curve Tuesday, pushing yields two to four basis points higher and the 30 year approaching 5% for the first time since May. 

Yields have been rising as investors pare bets on the Federal Reserve’s interest-rate cuts following a jobs report that revealed a surprisingly resilient US labor market. Interest-rate swaps show traders leaning toward a cut in September with two, quarter-point reductions by the end of the year. 

“It’s been typical to see consolidation coming out of the employment numbers into long end supply,” said Gregory Faranello, head of US rates trading and strategy for AmeriVet Securities. “Our mantra on lower yields remains the same: It needs to be economic, Fed driven.”  

Earlier on Tuesday, long-dated Japanese bonds sold off, sending a…