Longer-dated U.S. Treasurys yields rose on Monday on profit-taking after hitting multi-month lows last week, and on reduced bids from European traders following the close of European markets.
Traders sold 30-year Treasury bonds after their yields hit 3.3 percent last Thursday, which marked their lowest since June. Benchmark 10-year U.S. Treasurys yields also rose after briefly falling below 2.5 percent, which some view as a key technical resistance level.
"The longer end of the market has run a long way," said Wilmer Stith, fixed income portfolio manager for Wilmington Trust in Baltimore, Maryland. He said Monday's move up in yields was a "natural give-back."
Mixed economic data and a generally dovish outlook from the Federal Reserve have weighed on U.S. bond yields. In addition to the drop in longer-dated Treasurys yields last Thursday, benchmark 10-year Treasury yields fell as low as 2.473 percent that day, or the lowest since late October.
Investors also said the possibility of another cut in interest rates from the European Central Bank at its next policy meeting in early June made U.S. Treasurys yields more attractive to European investors, but that the bid lost some momentum after European markets closed.
"The fact that in Europe, rates are low and looking like they're going to go lower ... frankly makes U.S. Treasuries look very attractive," said Margaret Patel, senior portfolio manager at Wells Capital Management in Boston.
Investors also said that positive comments on the U.S. economy from San Francisco Fed President John Williams reduced some demand for long-dated bonds. Williams said the economy was growing as a whole and was "booming beyond belief" in the Seattle and Bay areas.
U.S. 30-year Treasury bond prices were last down 24/32 to yield 3.39 percent, from a yield of 3.35 percent late Friday. Benchmark 10-year U.S. Treasury notes were last down 6/32 in price to yield 2.55 percent, from a yield of 2.52 percent late Friday.
Prices on , meanwhile, were up just 1/32 to yield 0.35 percent, from 0.36 percent late Friday.
Some traders, however, did not rule out another drop in yields over the near-term, and cited the possibility of a downward revision to already-weak first-quarter U.S. gross domestic product growth as a potential reason for another rally in bond prices.
U.S. first-quarter GDP growth rose just 0.1 percent in the first quarter. The U.S. government will publish its second GDP estimate on May 29. First-quarter GDP growth could be revised downward to -0.6 percent, some economists say.
Traders also said that gains in U.S. stock indexes also weighed on Treasuries prices in afternoon trading. The benchmark S&P 500 ended up 0.38 percent.