Volume in early New York trading was slightly below the recent average, according to RBS Securities in Stamford, Connecticut.

Typically, bond traders try to sell Treasuries ahead of auctions to cheapen their when-issued prices, which can affect bidding and help buyers at the auction get a better deal.

The Treasury Department will sell a total of $60 billion in one-month and one-year T-bills at 11:30 a.m. (1530 GMT). At 1 p.m. (1700 GMT) it will auction $35 billion in two-year notes.

"We're getting ready for the auctions," said Raymond Remy, a trader at Daiwa Securities in New York.

Remy said he expected aggressive buying of two-year notes to begin once their yield reached 0.25 percent but added it was unlikely two-year yields would reach that level before the auction.

"Some time this week," he said of the 0.25 percent mark.

The two-year note was last unchanged in price and yielding 0.23 percent.

The benchmark 10-year note slipped 8/32 in price, its yield edging up to 2.14 percent from 2.11 percent late on Monday.

The 30-year Treasury bond was last trading 22/32 lower in price after briefly shedding more than a point, making its yield rise to 3.46 percent from 3.43 percent late on Monday.

Copyright Reuters, 2011