NEW YORK: US Treasury yields rose on Wednesday as traders braced for incoming supply and took profits from gains in 30-year Treasuries after yields on long-dated bonds fell on Tuesday.
The Treasury will sell $35 billion in five-year notes at 1 p.m. ET (1700 GMT), the second round of this week's hefty $90 billion in new supply of U.S. government debt. The upcoming auction weighed on prices, since traders typically sell debt ahead of auctions to make room for new supply.
Traders also showed less concern over Greece's debt burdens, which in turn limited demand for safe-haven Treasuries. Greece has to repay the International Monetary Fund 300 million euros on June 5, the first of four installments due in June that total 1.6 billion euros.
"You're probably seeing both a reaction to the supply and a recognition that the worries over the Greek debt situation have faded somewhat," said David Coard, head of sales and trading at Williams Capital in New York.
The push upward in yields, which move inversely to prices, occurred after 30-year Treasury yields fell about 11 basis points to 2.89 percent on Tuesday. That marked their biggest one-day decline since May 15.
The move Tuesday occurred largely in response to a more than 1 percent rally in the U.S. dollar, which on Wednesday posted modest gains against a basket of major currencies.
The dollar had rallied Tuesday on expectations that the Federal Reserve would hike rates sometime this year. The stronger dollar made U.S. bonds more attractive to investors, analysts said.
"Yesterday was a big shock, it was a big movement in the overall U.S. Treasury market, and I think with a void of really specific news, there are some that are taking a profit," said Robbert van Batenburg, director of market strategy at brokerage Newedge USA LLC in New York.
Traders looked ahead to Thursday's release of weekly U.S. jobless claims data and Friday's preliminary first-quarter U.S. gross domestic product data.
U.S. 30-year Treasury prices were last down 23/32 in price to yield 2.93 percent. Benchmark 10-year U.S. Treasury notes were last down 10/32 to yield 2.17 percent, from a yield of 2.14 percent late Tuesday.
U.S. five-year notes were last down 7/32 to yield 1.56 percent, from a yield of 1.52 percent late Tuesday.
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