NEW YORK: US Treasuries yields rose on Tuesday as investors made room ahead of a $35 billion sale of five-year government debt and reduced their bond holdings before the start of a two-day Federal Reserve policy meeting.
A stronger-than-expected February rise in US home prices according to data from Standard & Poor's and Case-Shiller and hedging on a pair of huge corporate bond issues compounded to a sell-off in bonds.
"The deals are weighing on the market whether it's rate-locking or just an increase in net supply," said Sean Murphy, a Treasuries trader at Societe Generale in New York.
Treasuries yields scaled back from their session highs following a surprise drop in the Conference Board's index on US consumer confidence to its lowest level since December.
The market decline was also limited by the absence of a breakthrough in talks between Greece and its creditors. Greek borrowing costs have fallen since Monday on hopes Athens will soon obtain more cash after Greek Prime Minister Alexis Tsipras reshuffled his negotiation team.
In early US trading, the yield on benchmark 10-year Treasuries notes was up 2.5 basis points from late on Monday to 1.949 percent.
The 30-year bond yield was 3.5 basis points higher at 2.647 percent.
The 10-year yield has traded in a tight 0.21 percentage point since the Federal Open Market Committee meeting in March when it downgraded its economic outlook.
The Fed's policy-setting group is scheduled to released a statement at 2 p.m. (1800 GMT) on Wednesday.
On balance, domestic data have come in weaker-than-forecast, supporting bets the US central bank might leave rates near zero into late 2015.
On Tuesday, S&P/Case Shiller said their gauge on home prices in 20 US cities grew 5.0 percent in February from a year ago, stronger than the 4.7 percent increase projected by analysts.
The upbeat data were mitigated by an unexpectedly drop in the Conference Board's index on US consumer confidence in April.
On the supply front, large corporate deals have competed for investors' attention with Amgen and Oracle said bringing out multi-part issues in the $2 billion to $3 billion area, and $8 billion to $10 billion area, respectively.
Shortly after 1 p.m. (1700 GMT), the Treasury Department will announce the results on its five-year note sale , part of this week's $90 billion in fixed-rate supply.
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