NEW YORK: US Treasury prices fell on Monday, with benchmark yields rising from near two-week lows as hopes of more overseas central bank stimuli stoked demand for stocks and other risky assets, reducing demand for low-yielding government debt.
Hedging linked to this week's corporate bond supply also spurred selling in Treasuries, analysts said.
Higher oil prices, boosted by hopes producers would act to stabilize the market, together with bets the Bank of Japan may provide more measures to help its economy in the wake of disappointing domestic growth and inflation data, propelled Wall Street's three major indexes to all-time highs.
"There is a bit of risk-on sentiment with the S&P at a
record high. There is also some corporate bond hedging," said Karl Haeling, vice president at Landesbank Baden-Wurttemberg in New York.
On light trading volume, benchmark 10-year Treasury notes were down 7/32 in price with a yield of 1.541 percent, up 2 basis points from late on Friday.
The 10-year yield touched a near two-week low on Friday following surprisingly weak data on July US retail sales. They undercut optimism about economic growth in the third quarter stemming from an upbeat July jobs report a week earlier.
Monday's US data was mixed, supporting the view that third-quarter gross domestic product may not be as strong as previously thought.
The New York Federal Reserve's "Empire" regional business gauge unexpectedly fell into contraction territory in August, while the National Association of Home Builders Association said its measure of members' view on the housing market edged up, as expected, in August. But it revised down its July reading.
On the supply front, companies are expected to sell $10 billion to $15 billion in investment-grade bonds this week, following nearly $39 billion sold last week, according to IFR, a unit of Thomson Reuters.