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Treasury Department auctions $24 billion of 3-year notes at a high yield of 0.926%

Bonds rose on Monday after the U.S. government's auction of three-year Treasury notes, the first of three debt auctions this week.

The Treasury Department auctioned $24 billion in three-year notes at a high yield of 0.926 percent, the lowest since August.

In the when-issued market, traders had expected the reopening of the three-year issue introduced in November to fetch a yield of 0.9440 percent. This compared with a yield of 1.066 percent in December.

The bid-to-cover ratio, an indicator of demand, was the best since October at 3.33.

The 10-year benchmark Treasury note extended earlier gains after the auction. It was last up 9/32 in price with the yield at 1.92 percent, compared with 1.969 percent on Friday.

U.S. Treasurys yields fell earlier with benchmark yields stuck below 2 percent as a renewed decline in oil prices and worries about Europe spurred a wave of safe-haven buying ahead of an auction of three-year government notes.

Symbol
Yield
 
Change
%Change
US 3-MO
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US 1-YR
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US 2-YR
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US 5-YR
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US 10-YR
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US 30-YR
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In terms of data, the week gets off to a quiet start after Friday's December labor market report which was solid in every respect but payrolls. The U.S. Federal Reserve's December composite labour market conditions index is out today and the latest JOLTS job openings figures due tomorrow.

Major releases later in the week include retail sales, industrial production and CPI data.

The figures from the Labor Department on Friday had the U.S. economy adding 252,000 to payrolls last month, and the November already robust gain revised higher, to 353,000. The unemployment rate, meanwhile, dropped to 5.6 percent, but the report showed hourly earnings declined.

France is recovering from last week's terrorist attacks in the capital Paris. Around 3.7 million people, including world leaders and statesmen, joined a mass rally in Paris on Sunday to remember the 17 victims of three separate attacks in Paris last week.

On the oil front, Brent crude and U.S. crude were at their lowest levels since April 2009 on the back of an over-supply in the market and lack of demand, and prices fell again on Monday morning.

Reuters contributed to this report.