NEW YORK: US Treasury prices slid on Monday, erasing some of Friday's gains, as investors sought to cheapen prices before the sale of $99 billion of US government debt this week.
Treasuries also came under technical pressure as the yields on several maturities traded near their 200-day moving averages, analysts said.
Absent major economic data on Monday, investors looked ahead to the sales of $35 billion of two-year notes on Tuesday, $35 billion of five-year notes on Wednesday and $29 billion of seven-year notes on Thursday.
"There are some supply pressures at work here," said John Canavan, market strategist at Stone & McCarthy Research Associates in Princeton, New Jersey.
"Treasuries continue to flirt with their 200-day moving averages," he added. "The combination of a small risk-on activity has caused Treasuries to revert to form following Friday's modest correction."
Benchmark 10-year Treasury notes were trading 09/32 lower in price to yield 1.796 percent, up from 1.77 percent late Friday but just below the 200-day moving average.
A pick-up in yields had spurred buying interest on Friday as jitters about the health of the US economy and the euro zone debt crisis drove demand for safe-haven assets.
Aside from the Treasuries auctions this week, investors were looking ahead to the Federal Reserve's policy meeting on Tuesday and Wednesday.
Investors believe the Fed is likely to hold off on fresh steps for now, opting to review the effects of the quantitative easing program, known as QE3, it launched last month. The US central bank is expected to keep a low profile in the last meeting before the Nov. 6 presidential election.
The Federal Reserve on Monday bought $1.89 billion of Treasuries maturing February 2036 through May 2042 as part of its stimulus program dubbed "Operation Twist," under which it is selling shorter-dated securities and buying longer-dated ones in an effort to lower longer-term borrowing costs, such as those on mortgages.
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