TREASURIES-US yields drift higher as shutdown enters day six

WASHINGTON, Oct 6 (Reuters) - Benchmark U.S. yields drifted higher on Monday morning as the federal government shutdown entered a sixth day, depriving markets of crucial economic data and leaving investor demand to soften.

The higher yields on two- and 10-year Treasuries added to Friday's gains, when the U.S. Labor Department missed September's report on the employment situation, a key indicator that has pointed to weakness in recent months in the world's largest economy.

Data produced in the private sector, one of the few bits and pieces investors have to go on at the moment, point to a labor market that remains somewhat stable for the time being, according to Stan Shipley, managing director for fixed income at Evercore ISI.

Public remarks this week from members of the Fed's policy-setting Federal Open Market Committee should garner unusual scrutiny in assessing the likelihood of another cut in interest rates at the Fed's October 28-29 meeting, according to Shipley.

"There's debate going around the community on how dovish is the Fed," he said. "We still think they're gonna go but it's a lot less clear because we don't have the data."

Those making appearances on Tuesday alone include Fed Vice Chair for Supervision Michelle Bowman and newly installed fellow Governor Stephen Miran. Kansas City Fed President Jeff Schmid is set to deliver remarks after the close.

The picture of demand for U.S. debt is due to broaden later in the week with auctions for three, 10- and 30-year U.S. notes and bonds. The University of Michigan is also due to update its consumer sentiment data series on Friday.

The yield on the benchmark U.S. 10-year Treasury note US10YT=TWEB was last up 3.3 basis points at 4.152%. The yield on the 30-year bond US30YT=TWEB had risen 3.1 basis points to 4.745%.

A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes US2US10=TWEB, seen as an indicator of economic expectations, was at a positive 56.0 basis points.

The two-year US2YT=TWEB U.S. Treasury yield, which typically moves in step with interest rate expectations for the Fed, rose 1.8 basis points to 3.59%, its highest level since August.

The breakeven rate on five-year U.S. Treasury Inflation-Protected Securities (TIPS) US5YTIP=TWEB was last at 2.411% after closing at 2.404% on October 3.