NEW YORK: US Treasuries prices edged up on Monday, with longer-dated maturities leading the rally, as oil prices fell on swelling oversupply, dragging stocks down and stoking interest in safe-haven U.S. government debt.
Prices on U.S. Treasuries had slumped on Friday as a resurgence in oil and stock prices drove selling of the debt, but oil prices fell after Iraq announced record-high oil production. Iraq's production fed into a heavily over-supplied market.
"All the movement is predicated on oil, so the stability we saw last week was largely because of oil looking like it was settling, and today not so much," said Gennadiy Goldberg, interest rate strategist at TD Securities in New York.
Monday's Treasury rally was also marginally supported by weaker-than-expected IFO data from Germany and disappointing Japanese export and import data, which slightly boosted investor appetite for U.S. government debt.
With little domestic data due this week, investors focused on the Federal Reserve's two-day policy meeting that kicks off on Tuesday.
In recent weeks, against a backdrop of volatile trading in global stocks, Fed officials have shrugged off the impact of financial market swings on their decisions.
While investors expect the Fed's message to remain unchanged, they hope to hear whether global market volatility and weakness seen for much of January has impacted the central bank's plans for rate increases for the rest of the year.
"We're looking for them to acknowledge some of the global weakening and volatility like they did in September, but not to the same extent where they told the market they wouldn't move," said Goldberg.
The Treasury Department will sell $67 billion this week, beginning with a $34 billion sale of 13-week bills and a $28 billion auction of 26-week bills on Monday.
The 2-year note was last flat at a yield of 0.868 percent, little changed from 0.869 percent on Friday.
Benchmark 10-year note was last up 4/32 in price to yield 2.036 percent, down from 2.048 percent late on Friday.
The 30-year bond was last up 11/32 in price to yield 2.806 percent, down from 2.821 percent late on Friday.
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