NEW YORK: US Treasury yields rose on Monday as investors evaluated when the Federal Reserve is likely to next raise interest rates again and awaited Friday's highly anticipated jobs report for April.
Yields have fallen since the Fed kept interest rates unchanged last Wednesday and described an improving labor market while also acknowledging that economic growth seemed to have slowed.
The US central bank also removed a reference to global risks, opening the door slightly to an interest rate hike in June, but some analysts viewed the move as less hawkish than they had expected.
"They weren't really eager to pound the table and keep June on the table ...," said Aaron Kohli, an interest rate strategist at BMO Capital Markets in New York. "Right now to bet on the Fed you almost have to bet that everything will go perfectly, and no one is willing to bet on that yet."
Benchmark 10-year notes fell 7/32 in price to yield 1.84 percent, up from 1.82 percent on Friday. The yields have fallen from 1.94 percent on Tuesday, the day before the Fed's statement.
Rising stock prices on Monday also reduced demand for safe-haven US bonds.
Investors have priced in a low chance of further interest rate hikes this year even as Fed officials and economists indicate that two increases are likely.
One factor dissuading investors from betting on rate increases in the bond market is that it is costly to take a medium-term view that yields will rise in June, while worsening economic data or any new volatility in oil or equity prices could also send yields still lower.
"The risk/reward is not there yet," said Kohli.
Speeches by Federal Reserve officials this week will be in focus for any new indications of when an interest rate hike is likely.
Data will be dominated by Friday's employment report, which is expected to show that employers added 200,000 jobs in April, according to the median estimate of 88 economists polled by Reuters.
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