CHICAGO: US Treasury yields fell on Monday, retreating a bit from last week's higher levels as the market awaited a new burst of supply to finance stimulus efforts to combat the economic fallout from the coronavirus pandemic.

The benchmark 10-year yield was last down 2.6 basis points at 0.6833%.

"After the yield moves of last week, it's only natural if only from a technical perspective to see a little bit of a retracement here," said Ben Jeffery, a strategist at BMO Capital Markets in New York.

He added that weaker-than-expected Empire State manufacturing data from the New York Federal Reserve contributed to the downward move in yields.

Yields rose last week as the market was hit with $112 billion in record supply of 30-year bonds and three- and 10-year notes. Auctions this week include $25 billion of 20-year bonds on Wednesday and $7 billion of 30-year Treasury-Inflation Protected Securities (TIPS) on Thursday.

"There is a wall of supply that needs to be absorbed by the capital markets," said William Northey, senior investment director at US Bank Wealth Management, adding that there could be a "fatigue level" that would allow longer-term rates to drift a bit higher.

Minutes of the Federal Reserve's latest meeting, due on Wednesday, are expected to provide more insight into the central bank's view of the economic recovery. Northey said the minutes could include additional details on perspectives around inflation targeting.

A closely watched part of the US Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, which is viewed as an indicator of economic expectations, was last at 53 basis points, about 3 basis points lower than at Friday's close.