U.S. bonds rose on Monday, extending last week's gains as a deepening sell-off on Wall Street inspired a flight into safer government debt, sending the 30-year yield to its lowest in a week.
The safe-haven bids built on earlier buying from traders who sought to pare bets the Federal Reserve might increase policy rates in the first half of 2015 after a March jobs report missed their upbeat expectations.
The market has strengthened in advance of the sale of $64 billion in coupon-bearing securities, which typically causes bond prices to fall as investors make room for the supply.
"The driving factors this week are supply and whether the stock market falls off the cliff," said Thomas Roth, executive director of U.S. government trading of Mitsubishi UFJ Securities in New York.
Government debt prices jumped on Friday after the government reported a gain of 192,000 nonfarm payroll jobs in March, which was solid but fewer than what some traders had anticipated.
They had thought a figure of more than 200,000 would cause Fed policy-makers to consider an earlier-than-expected schedule to raise short-term interest rates to prevent the economy from overheating.
"After this latest payrolls number, people reached the conclusion they were too ambitious with the Fed's first rate hike," said Mike Lorizio, head of Treasuries trading at John Hancock Asset Management in Boston.