Yields edge up as traders await inflation data

* Fed funds futures show 59% odds of September rate hike

* Producer Price Index report due on Thursday, CPI report out on Friday

* Treasury sees strong demand for three-year note auction

NEW YORK, Sept 8 (Reuters) - U.S. Treasury yields edged higher on Tuesday as traders awaited key inflation data due later this week for clues on whether the Federal Reserve is likely to raise interest rates this month.

Traders raised bets on a rate hike at the U.S. central bank’s September 15-16 meeting after the Labor Department reported on Friday that employers added far more positions than expected in August.