2018.02.2020:05:00UTC+00U.S. Yields Continue Rally after Bond Auction

U.S. Treasury yields rose on Tuesday, as U.S. investors came back from an extended weekend and faced the first wave of debt auctions from the Department of Treasury.

Yield on the two-year note, reactive to expectations for monetary policy, rose 3.4 basis points to 2.227 percent, its highest since September 2008, Last week, the yield on the short-dated bond recorded its biggest weekly increase since March and has risen for the six consecutive day.

The 10-year Treasury note yield advanced 1.8 basis points to 2.895 percent, after rising as high as 2.926 percent. The yield on the 30-year bond rate moved in the same direction, rising 1.8 basis points to 3.154 percent.

The upward movement in yields continued on Tuesday as investors returned to Treasury markets after the Presidents' Day holiday that was observed on Monday. Yields had retreated on Friday ahead of the three-day weekend.

Bond rates have been climbing higher in the run-up to a wave of U.S. debt supply flowing into the market this week. The Treasury Department will sell $35 billion of five-year notes on Wednesday and $29 billion of seven-year notes. The auctions are marginally bigger in line with February's refunding announcement, but the majority of the issuance will stem from shorter-dated Treasury bills with maturities of a year or less.