US yields up ahead of $69bn in new supply, ebbing trade fears

NEW YORK: Treasuries yields rose on Monday as investors moved into equities and freed up cash for new Treasuries auctions this week, following a strong US jobs report on Friday and a muted response to the start of US tariffs on Chinese imports.

"We had flight to quality because of the trade tariffs. But I think at the end this doesn't mean a trade war is really taking place," said Tom di Galoma, managing director at Seaport Global Securities LLC in New York.

The yield curve remained near its flattest spread since 2007 on low inflation expectations and rate hikes from the Federal Reserve.

Last week's jobs report showed lower-than-expected wage gains, suggesting that inflation is not accelerating ahead of this Thursday's core CPI inflation report.

Investors also made room for $69 billion worth of auctions in 3-year and 10-year Treasury notes and 30-year bonds starting Tuesday.

Monday's risk-on trade sent global stocks to a two-week high, marked by a 1.3 percent rise in MSCI's broadest index of Asia-Pacific shares outside Japan.

The Nasdaq, S&P 500 and Dow Jones Industrial average all opened the week higher than Friday's close.

The benchmark U.S 10-year note yielded 2.860 percent at 9:42 a.m. EDT (1342 GMT), up 2.7 basis points from Friday.

The yield curve between two-year and 10-year notes was slightly higher from the previous week's close at 28.90 basis points.