NEW YORK: US Treasuries prices fell on Monday as traders booked profits on last week's gains tied to disappointing data that supported expectations the Federal Reserve might postpone raising interest rates until 2016.
Weakness in European government debt markets added selling pressure on their US counterparts, with 30-year Treasury yields moving back above 3 percent. Record intraday highs on the Dow Jones industrial average and Standard & Poor's 500 index also weighed on bonds.
"There's been the bias to sell into strength," said Ed Atkins, Treasury strategist at RBS Securities in Stamford, Connecticut. "It seems like Friday's flattening positions might not have the conviction that some people had thought."
Slowing economic growth in recent months, stemming partly from a stronger dollar and sluggish wage growth, has led many investors to scale back expectations about a Fed rate hike in 2015.
This led to new appetite for longer-dated Treasuries last Thursday and Friday, pushing their yields below their 5-1/2 month peaks.
On Monday, the National Association of Home Builders said its index of members' sentiment fell to 54 points in May from 56 in April, falling short of a forecast increase to 57 among economists polled by Reuters.
Analysts said domestic consumer price inflation data on Friday would be critical for the Fed to determine whether the risk of low inflation is fading as oil and other commodity prices have risen in recent weeks.
The US central bank on Wednesday will release minutes from its April meeting, which will be scrutinized for any new signs on when it could begin raising rates.
Lingering concerns about the absence of a deal between Greece and its creditors also stoked some safe-haven demand for US Treasuries and selling in debt of Greece and other weaker euro zone nations.
"The Greek situation continues to spin its wheels," Atkins said.
The yield on German 10-year Bunds edged up 1 basis point to 0.649 percent, while the yield on 10-year Greek sovereign bonds jumped 84 basis points to 11.45 percent, the highest in 2-1/2 weeks.
On light volume, benchmark 10-year Treasuries notes were 25/32 lower in price to yield 2.228 percent, up 9 basis points from late on Friday, while the 30-year bond was 1-29/32 points lower, yielding 3.020 percent, up 10 basis points.
The spread between five-year and 30-year yields widened more than 2 basis points to 1.49 percent after it flattened 9 basis points on Friday.
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