NEW YORK: US Treasury yields inched higher on Monday as concerns over global growth eased, leading traders to sell some safe-haven U.S. government debt ahead of a week of heavy government and corporate supply.
Another pounding of Chinese stocks led world stocks to fall to near 2-1/2 year lows, but appetite for Treasuries was low, with traders and analysts saying the decline in yields last week was overextended.
"Last week Treasuries rallied because Chinese stocks fell and today Chinese stocks fell, but we didn't rally, suggesting the panic from last week seems to have subsided," said Ian Lyngen, senior government bond strategist at CRT Capital in Stamford, Connecticut.
Analysts are continuing to monitor the impact of slowing global growth on Treasuries. But many expect moves in the government debt market to be driven by corporate and government supply this week rather than by Chinese markets.
The Treasury will sell a total of $112 billion for the week. Among those sales will be an auction of $24 billion of 3-year notes on Tuesday, $21 billion of 10-year notes on Wednesday and $13 billion of 30-year notes on Thursday.
Traders will also be listening to Federal Reserve speakers throughout the week. Atlanta Fed President Dennis Lockhart will speak on monetary policy before the Rotary Club of Atlanta at 12:40 p.m. (1740 GMT) on Monday, and Dallas Federal Reserve Rob Kaplan will speak before the North Texas Economic Forum in the evening.
John Williams, president of the Federal Reserve of San Francisco, said last week that turmoil in Chinese markets was not affecting the U.S. central bank's policy outlook.
"We're not expecting grand insight," said Lyngen, but the Fed is "effectively telling us they aren't going to react and any reiteration of that is important."
Yields dipped on Friday after Labor Department data showed U.S. nonfarm payrolls increased by a larger-than-expected 292,000 in December.
Benchmark 10-year notes were last down 10/32 in price on Monday to yield 2.164 percent, up from 2.131 percent on Friday.
The 30-year bond was last down 24/32 in price to yield 2.957 percent, up from 2.921 percent on Friday.
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