US 10-year government bond yields were up 0.07 basis points at 1.57 percent, still not far from a record low of slightly below 1.40 percent hit in July, underpinned in part by worries that Spain would require a sovereign financial bailout.

European Central Bank President Mario Draghi has outlined a plan to buy sovereign debt in cooperation with the euro zone bailout funds - but not before September, and only if countries ask to use the funds and accept strict supervision.

That conditional pledge suggests the situation in Spain may have to deteriorate and borrowing costs rise further before the country seeks aid, opening the door to ECB intervention, according to some analysts.

Underlying demand for safe-haven bonds is therefore likely to persist and could fuel appetite for $72 billion of US government debt supply this week.

"We are still a long way from a long-term solution (in Europe) and that should be a positive for US Treasuries," Thomas Rahman, credit strategist, at RIA Capital Markets said.

The Treasury will auction $32 billion of two-year notes on Tuesday, $24 billion of 10-year notes on Wednesday and $16 billion of 30-year bonds on Thursday to meet its quarterly refunding needs.

Two-year US Treasury yields were flat at 0.24 percent and thirty-year yields were little changed at 2.66 percent.

"I think threes and tens will be fine, the (30-year) bond is going to be a little bit trickier," one trader said.

"Anybody who had been short, although there weren't many of them, ... has the opportunity now to cover up very quickly."

The trader said the market was too illiquid to make a conclusive assessment of its take on the latest developments in Europe: "If you look at some of the (US futures) volume numbers ... versus June (they) are down something like 40-50 percent," he added.