NEW YORK: US Treasury prices fell on Monday after centrist Emmanuel Macron's victory in the first round of France's presidential race meant the country would stay in the European Union and preserve the euro, fueling a selloff of safe-haven assets.
Overall yields, which move inversely to prices, rose to two-week highs as result of Macron's win.
The French election result was viewed as positive for Europe, reducing the risk of an anti-establishment scare similar in scale to that of Britain's vote to quit the EU and the election of Donald Trump as US president in November.
Ahead of the election, Treasury prices had rallied as investors sought protection against a potentially destabilizing outcome.
"A Macron victory derails a negative scenario, which means that we won't see a threat to the euro or the European Union," said Bruno Braixinha, interest rates strategist, at Societe Generale in New York.
"Macron also translates to a different type politics in France because he doesn't come from the two main parties. So the expectation is that he will be able to jumpstart the French economy," he added.
In mid-morning trading, benchmark 10-year notes were up 15/32 in price to yield 2.289 percent, from 2.236 percent. Yields hit a two-week peak of 2.325 percent earlier in the aftermath of the French election outcome.
The 10-year yield briefly dipped to 2.165 percent last week, the lowest since Nov. 10. The notes had struggled to hold below strong technical resistance at yields of around 2.19 percent.
US 30-year bond prices were up 26/32, yielding 2.935 percent, up from Friday's 2.894 percent. Thirty-year yields earlier touched a two-week peak of 2.964 percent.
On the front-end of the curve, US two-year yields were also up at 1.241 percent, from 1.184 percent last Friday.
Treasury supply is also in focus this week, with the auction of $88 billion in two-year, five-year and seven-year notes.
Investors are also awaiting a tax plan announcement by President Trump on Wednesday.
Last week, Trump promised a "big announcement" on overhauling the US tax code, a top campaign pledge. An administration official said over the weekend the announcement will consist of "broad principles and priorities."
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