NEW YORK: US Treasury yields rose on Tuesday as oil prices traded near recent highs, reducing demand for safe haven bonds, and before the U.S. government is due to sell $88 billion in new coupon-bearing supply.
US crude futures eased slightly on the day but held above $33 a barrel, following a 6 percent rally on Monday, as speculation about falling U.S. shale output fed the notion that crude prices may be bottoming after their 20-month collapse.
Signs that the oil and equity markets are stabilizing after dramatic price drops earlier this month have reduced demand for Treasuries, lifting yields from three-year lows reached on Feb. 11.
"We're still trading off the global risk tone ... everything's moving off the oil complex," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York.
Benchmark 10-year notes were last down 12/32 in price to yield 1.81 percent, up from 1.76 percent late Monday.
Two-year note yields also increased before the Treasury is due to sell $26 billion in new notes on Tuesday, the first sale of $88 billion in coupon-bearing debt this week.
Two-year yields increased to 0.78 percent, up from 0.76 percent late Monday.
The Treasury also will sell $34 billion in five-year notes on Wednesday and $28 billion in seven-year notes on Thursday.
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