NEW YORK: Medium- and longer-dated US Treasuries yields rose on Wednesday on anticipation that minutes from the Federal Reserve's April policy meeting could suggest the central bank will raise interest rates more slowly than expected.
Profit-taking after a recent rally also sent yields higher.
Traders said US Treasury notes maturing between 2-5 years were more attractive than 10-year Treasury notes and 30-year Treasury bonds in the event of a slower path of rate hikes. The FOMC minutes are set for release at 2:00 pm EDT (1800 GMT).
"There's a concern that rates will rise much more slowly than the market is anticipating," said Sean Murphy, Treasuries trader at Societe Generale in New York.
Shorter-term Treasury notes, which are more vulnerable to a hike in interest rates, had also become more insulated since New York Federal Reserve President William Dudley said Tuesday that the central bank would likely be "relatively slow" in hiking rates, traders said.
They sold 30-year Treasuries bonds to book profits after their prices rose and yields hit 3.303 percent last Thursday, the lowest level since last June. Remaining short bets against Treasuries also kept 30-year yields well above 3.3 percent, traders said.
Benchmark 10-year US Treasury notes also came under selling pressure after yields hit 2.473 percent last Thursday, the lowest level since late October.
"The rally in the long end specifically has gotten a little bit long in the tooth," said Gabriel Mann, US Treasuries strategist at RBS Securities in Stamford, Connecticut. "Market participants seem to want to defend the 3.3 percent yield on the 30-year bond and the 2.47 percent yield on the 10-year."
Prices on 30-year Treasury bonds were last down 27/32 to yield 3.42 percent, from 3.375 percent late Tuesday. Benchmark 10-year Treasury notes were last down 10/32 in price to yield 2.54 percent, from 2.509 percent late Tuesday.
Prices on two-year Treasury notes traded down just 1/32 to yield 0.35 percent, from 0.33 percent late Tuesday.
On Wall Street, US stocks opened higher, with the S&P 500 last up 0.62 percent and on track to rebound from a broad sell-off in the prior session.
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