* Treasury to sell $12 bln 30-year bonds * Consumer price data on Friday in focus * Producer prices rise in September By Karen Brettell NEW YORK, Oct 12 (Reuters) - U.S. Treasury yields rose before the Treasury Department is due to sell new 30-year supply, and after data showed that U.S. producer prices rose in September.
The Treasury Department will sell $12 billion in 30-year bonds on Thursday, the final sale of $56 billion in new coupon-bearing supply this week.
The government saw solid demand for $24 billion in three-year notes and $20 billion in 10-year notes on Wednesday.
The Labor Department said on Thursday its producer price index for final demand increased 0.4 percent last month. In the 12 months through September, the PPI jumped 2.6 percent, the biggest gain since February 2012.
Traders are mainly focused, however, on consumer price data due on Friday for further indications of whether inflation is picking up.
“PPI was a little bit better, but that doesn’t really translate well to CPI,” said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York. “I think for the most part markets are still waiting for the CPI report tomorrow.” Benchmark 10-year notes were last up 1/32 in price to yield 2.341 percent, up from 2.334 percent before the data.
The 10-year yields jumped to 2.402 percent on Friday, the highest level since May 11, after the government’s employment report for September showed a rise in wages that boosted expectations inflation is increasing.
Analysts, however, have said that data is muddied by recent hurricanes. Adverse weather is seen as having impeded lower-income workers from getting to work more than it did higher-income workers.
Minutes from the Federal Reserve’s September meeting released on Wednesday showed that Fed policymakers had a prolonged debate about the prospects of a pickup in inflation and the path of future interest rate rises if it did not.
(Editing by Susan Thomas) )