U.S. Treasurys were steady on Monday ahead of this week's sales of $99 billion in new intermediate-dated debt, with little fresh data on tap to give clues over the timing of when the Federal Reserve is likely to pare back its bond-purchase program.
Treasury yields have fallen over the past two weeks as top Fed officials including Chairman Ben Bernanke said that the U.S. central bank's plans to taper purchases are still dependent on economic data and that it will hold benchmark interest rates at record low levels for a long time to come.
Data on Monday that showed that U.S. home resales fell unexpectedly in June made some question whether the recent backup in mortgage yields may weigh on the housing recovery.
"This report shows that housing is more sensitive to interest rates than most economists have been anticipating," said Steven Ricchiuto, chief economist of Mizuho Securities in New York, in a note to clients.
A surge in prices to a five-year high, however, suggested the housing market recovery remained on course.
The Fed officials' comments have led investors to start pushing back ideas of when the Fed will start reducing its monthly $85 billion purchases to later in the year from expectations for September, as thought earlier.
"The market seems to have discounted that again because Bernanke is using forward guidance and became very dovish," said Mary Beth Fisher, head of U.S. interest rate strategy at Societe Generale in New York.
"I don't think that changes anything, I think you would need unemployment to weaken significantly in the next two reports for them to not go ahead and begin tapering," she added.