NEW YORK: US Treasury yields rose on Monday in volatile trading as traders increased bets the Federal Reserve will raise interest rates this year in the wake of a strong February jobs report and ahead of a European Central Bank meeting.
Momentum from Friday's employment report, which showed nonfarm payrolls added 242,000 jobs in February, continued to put pressure on safe-haven government debt.
"The reaction in markets is still based on the better-than-expected jobs data from Friday, which pushed back expectations for the Fed to raise rates," said Cheng Chen, interest rates strategist at TD Securities in New York. "More investors now expect the next hike will come sooner than later."
The selling was stoked by the government's supply of debt scheduled for this week, but yield gains were limited by caution ahead of Thursday's European Central Bank meeting.
The ECB is expected to push interest rates further into negative territory and make an adjustment to its bond-buying program. But after the bank disappointed many in markets in December, traders are wary of making major bets prior to the meeting.
"The other thing driving action today is that markets are looking to see how much (ECB chief Mario) Draghi will deliver, so trading will be modest leading into the meeting," said Chen.
The Treasury Department will sell $24 billion of 3-year notes on Tuesday, $20 billion of 10-year notes on Wednesday and $12 billion of 30-year bonds on Thursday.
The Federal Open Market Committee, the Fed's policy-setting group, will next meet on March 15-16.
The benchmark 10-year note's yield rose to 1.918 percent, its highest in just over a month. It was last down 9/32 in price to yield 1.9127 percent, up from 1.883 percent late on Friday.
The 30-year bond was last down 8/32 in price to yield 2.715 percent, up from 2.703 percent late on Friday.
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