Yields rise as Greek, euro zone leaders strike deal

U.S. Treasury yields rose on Monday after Greek and euro zone leaders reached a deal that is likely to keep Greece in the single currency and as a large corporate bond deal weighed on the market.

Euro zone leaders made Greece surrender much of its sovereignty to outside supervision in return for talks on an 86-billion-euro bailout to keep the near-bankrupt country within the single currency union.

The news reduced safe-haven buying of U.S. debt and boosted riskier assets including equities.

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Drugstore chain CVS Health also came to market with a bond sale of up to $15 billion to finance its acquisitions of Omnicare and Target Pharmacies, according to IFR, a Thomson Reuters service.

The CVS deal "definitely put some pressure on the market," said Dan Mulholland, head of Treasurys trading at Credit Agricole in New York.

Read MoreGreece and euro zone 'unanimously' reach deal

Benchmark 10-year notes were last yielding 2.423 percent, up from 2.38 percent before the Greek deal was announced earlier on Monday. The yields have risen from a low of 2.18 percent on Thursday as hopes for a resolution increased.

Yields also increased as investors anticipated the Federal Reserve is closer to raising interest rates for the first time in nearly ten years, after Fed Chair Janet Yellen said on Friday she expects a rate hike at some point this year.

"Everyone is waiting for Yellen's remarks after her comments on Friday, which were fairly hawkish," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York.

Read MoreAfter turbulence, traders could stay close to home in week ahead

Yellen is due to give her Humphrey-Hawkins testimony to Congress on Wednesday and Thursday.

Investors now expect that the Fed is likely to begin raising rates at its September meeting. "I think they are very close to hiking rates and the market is now finally starting to understand that," said Goldberg.

U.S. economic data will be closely evaluated for signs that growth is improving at a pace that will allow the Fed to begin raising rates. The next major economic report will be retail sales data for June, due out on Tuesday.