NEW YORK: US Treasuries yields rose on Wednesday, with benchmark and longer-dated yields rising the most, after traders sold the debt to make way for new supply and continued to anticipate a more hawkish statement from the Federal Reserve next week.
Benchmark 10-year yields remained at their highest in over a month, while 30-year yields remained at their highest in just under a month as traders awaited U.S. Treasury auctions of $21 billion of 10-year notes on Wednesday at 1 pm (1700 GMT) and $13 billion of 30-year bonds on Thursday.
Traders "really don't want to be long ahead of the auction" given selling pressure ahead of the new supply, said Ellis Phifer, market strategist at Raymond James in Memphis, Tennessee.
Wednesday's auction follows the Treasury's sale of $27 billion of three-year notes Tuesday at 1.066 percent, the highest yield at an auction of this maturity since April 2011, according to Treasury data.
Traders also remained on guard for a more hawkish stance on monetary policy from the Fed at its next policy meeting on Sept. 16-17. Analysts said the U.S. central bank may hint at an earlier-than-expected hike in interest rates in response to progress in U.S. jobs growth.
"There are a lot of dovish points to the statement that, in the next couple of meetings, are going to have to come out or change," said John Briggs, U.S. rates strategist at RBS in Stamford, Connecticut.
Given the potential for a more hawkish statement, "the path of least resistance is to move higher in yields," Briggs said. He said the 10-year yield could hit a high of 2.65 percent ahead of the meeting.
A study from the San Francisco Fed released Monday continued to fuel expectations of a more hawkish tone from the Fed on raising interest rates. The study showed that investors underestimated the speed at which the Fed might raise rates.
U.S. 10-year Treasury notes were last down 9/32 in price to yield 2.53 percent, compared to a yield of 2.5 percent late Tuesday. The yield hit a session high of 2.54 percent, which marked its highest since August 1.
U.S. 30-year Treasury bonds were last down 22/32 in price to yield 3.27 percent. The yield continued to hover at its highest level since Aug. 13 and was up from a yield of 3.23 percent late Tuesday.
On Wall Street, the benchmark S&P 500 fell slightly after investors found few incentives to jump back into the market after a recent string of declines.
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