U.S. Treasury debt prices were little changed to slightly higher on Monday in thin trading, after a rally the previous session following a soft U.S. non-farm payrolls report, with markets looking to this week's heavy supply on both the short and long-end. Markets are also awaiting the first testimony of Federal Reserve Chair Janet Yellen, who testifies in Congress on Tuesday and Thursday after a second month of weaker-than-expected U.S. jobs data. "
A lot of the action is looking forward to supply over the next three days," said Guy LeBas, chief fixed income strategist, at Janney Montgomery Scott in Philadelphia.
"We're in a little bit of a downtrend ahead of long duration supply and questions and discussions about the Yellen testimony." There was nothing on the U.S. data calendar on Monday except for the large T-bill auctions, including $84 billion in three- and six-month bills and $50 billion of l72-day cash management bills.
The Treasury, meanwhile, will sell $70 billion in new coupon-bearing debt this week, including $30 billion in three-year notes, $24 billion in 10-year notes and $16 billion in 30-year bonds. The Fed, meanwhile, will purchase between $2.25 billion and $2.75 billion in notes due 2021 to 2023 on Monday.