TREASURIES-U.S. 10-yr yield tops 1.5% level last seen in June

(Updates with market activity, economic data, analyst comment, bylines and dateline) By Ross Kerber and Dhara Ranasinghe Sept 27 (Reuters) - U.S. Treasury yields resumed their march higher on Monday, with 10-year yields hitting their highest level in three months on solid economic data and signals the Federal Reserve is shifting towards a more hawkish policy. The 10-year Treasury yield rose as high as 1.516% in morning trading, its first time above 1.5% since June 29, and was last up 2.4 basis points at 1.4854%. The benchmark note's yield rose almost 9 basis points last week, the fifth week of gains and the biggest weekly jump since March, as investors reacted to hawkish shifts by major central banks including the U.S. Federal Reserve and the Bank of England. Across the curve, most other Treasury yields were higher on the day on Monday with 30-year yields rising above 2% for the first time since mid-August. Analysts said the continued selloff in bond markets was likely driven by position adjustments and a reassessment of the inflation outlook. Jim Barnes, director of fixed income at Bryn Mawr Trust, said a strong Commerce Department report on durable goods Monday morning contributed to traders' risk-on sentiment. Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.5% last month, the department said. Economists polled by Reuters had forecast core capital goods orders increasing 0.4%. "Today's continuing rise in yields was the economic picture catching up to the central bank news we got from last week," Barnes said. The Fed has said it will start to reduce its bond purchases as soon as November if the economy continues on its current track. The yield on the two-year U.S. Treasury note, seen as a sign of inflation expectations, was up less than a basis point at 0.2799% in morning trading. September 27 Monday 8:57AM New York / 1257 GMT Price Current Net Yield % Change (bps) Three-month bills 0.03 0.0304 -0.005 Six-month bills 0.0525 0.0532 0.002 Two-year note 99-180/256 0.2799 0.006 Three-year note 99-120/256 0.5559 0.011 Five-year note 98-232/256 0.9781 0.020 Seven-year note 98-236/256 1.2882 0.026 10-year note 97-216/256 1.4854 0.024 20-year bond 96-184/256 1.9498 0.016 30-year bond 99-248/256 2.0014 0.014 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 11.00 -0.25 spread U.S. 3-year dollar swap 12.25 0.00 spread U.S. 5-year dollar swap 9.50 0.00 spread U.S. 10-year dollar swap 2.50 -0.25 spread U.S. 30-year dollar swap -24.50 -0.50 spread (Reporting by Dhara Ranasinghe; editing by Sujata Rao; Editing by Bernadette Baum)