TREASURIES-Yields rise as strong service sector hiring boosts jobs bets

(Recasts with market move, adds details on data; quotes, updates prices) * Friday's September payrolls report in focus * Payrolls expectations boosted by ISM hiring data * ADP jobs data weaker than expected By Karen Brettell NEW YORK, Oct 5 (Reuters) - U.S. Treasury yields rose on Wednesday after data showing strong hiring in the services sector boosted hiring expectations for Friday's highly anticipated jobs report.

The Institute of Supply Management (ISM) said on Wednesday that U.S. services sector activity rebounded to an 11-month high in September, while its employment index was also the highest since October 2015.

It came after the ADP National Employment Report data missed economists' expectations, showing that U.S. private employers added 154,000 jobs in September.

"ISM spurred more thoughts about the possibility of non-farm payrolls being much better than ADP," said Jim Vogel, an interest rate strategist at FTN Financial in Memphis, Tennessee.

Friday's employment report is expected to show 175,000 jobs were added in the month, according to the median estimate of 100 economists polled by Reuters.

Investors will also focus on whether August's weaker-than-expected gain of 151,000 jobs will be revised upward.

Benchmark 10-year notes fell 11/32 in price to yield 1.72 percent, up from 1.68 percent late on Tuesday. The yields have climbed from a low of 1.53 percent on Friday.

Demand for safe haven bonds has fallen since Friday, when concerns about the stability of Deutsche Bank eased.

"Sentiment has been bad since it became clear that there wasn't going to be any immediate further concerns about Deutsche," Vogel said. "There was pent-up selling that wasn't executed when we were watching that situation that got unleashed on Friday afternoon." Investors are also focused on an Oct. 14 speech by Federal Reserve Chair Janet Yellen at a Boston Fed economics conference for any new signals of when the U.S. central bank is likely to next raise interest rates.

It may be Yellen's last chance to indicate whether a rate hike is likely at the Fed's policy meeting in early November.

Traders are pricing in a 17 percent chance that the Fed will raise rates in November and a 64 percent chance of an increase in December, according to CME Group's FedWatch program.

(Editing by Jeffrey Benkoe and Paul Simao)

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