US 10-year notes nudge lower after surge

Ten-year notes dipped 5/32 in price to yield around 2.149 percent, up from New York's low of around 2.111 percent.

Thirty-year bonds, which on Monday posted their best day since the Federal Reserve announced its first massive stimulus programme also came off overnight highs, with the yield recovering from a low of 3.128 percent to around 3.165 percent.

After wild swings the day before, traders said they wanted to be positioned neutrally ahead of the Fed's two-day monetary policy meeting starting later in the day and US economic data, including jobs, due later this week.

"Traders are taking a wait-and-see stance ahead of big events, but longer term, I don't see the recent trend of bond underperformance changing dramatically," said Hiroki Shimazu, senior market economist at SMBC Nikko Securities, adding the yield on 10-year notes may climb to around 2.3-2.5 percent by year-end

One possible support for the 10-year note lies near 2.44 percent, which roughly coincides with the 10-year yield's 100-day moving average and the 50 percent retracement of a July to September rally in 10-year Treasuries.

The Treasury Department holds its weekly sale of 4-week bills at 1530 GMT.

Copyright Reuters, 2011