NEW YORK: US Treasury yields rose slightly on Tuesday as oil and stock prices gained, reducing demand for safe haven bonds.
US government bonds have largely followed moves in the oil and stock markets this week with no major economic releases to sway investor sentiment, and before the Federal Reserve is due to meet next week.
Oil prices quickly recovered from lows reached early on Monday, after a deal to freeze oil output by OPEC and non-OPEC producers fell apart on Sunday. The oil recovery in turn boosted stock markets and reduced demand for Treasuries.
"It does feel like we are really drifting and taking cues from risk sentiment at this point," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York.
Benchmark 10-year notes were last down 2/32 in price to yield 1.78 percent, up from 1.77 percent on Monday.
Bonds pared price losses after data showed that US housing starts fell more than expected in March and permits for future home construction hit a one-year low, suggesting some cooling in the housing market in line with signs of a sharp slowdown in economic growth in the first quarter.
With no major economic releases this week investors are largely focused on next week's Fed meeting.
The US central bank is seen as unlikely to raise interest rates this month though investors will be watching for any indications that it may hike rates at its June meeting.
Fed speakers including Fed Chair Janet Yellen and New York Fed President William Dudley have recently indicated that the Fed remains cautious in raising rates.
"The speakers that we've heard over the past few weeks have made it abundantly clear that they're going to remain on the side of dovishness," said Goldberg.
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