Treasury yields edge up from record lows

US 10-YR
US 30-YR

Long-dated U.S. Treasury debt turned lower on Monday after investors spooked by Greece's newly elected government drove up prices and briefly knocked yields on the U.S. 30-year bond to fresh record lows.

Thirty-year bonds were last off 7/32 in price to yield 2.38 percent after touching a fresh record low in overseas trading of 2.336 percent.

"We were up a lot higher earlier this morning, simply on wait-and-see from the Greek election. But that was pretty well priced in," said Lou Brien, market strategist at DRW Trading in Chicago.

Read MoreNew Greek government to keep markets on edge

Greek election winning party Syriza's demands for a debt restructuring raised the prospect of a stand-off between Athens and other European nations that might lead to Greece exiting the euro grouping, although financial markets were treating that as a marginal risk on Monday.

As Europe battles slumping growth with a massive rate-cutting stimulus program detailed last week, investors have been turning to American federal debt as they reach for longer-dated bonds to generate higher yields.

Treasuries, which are widely expected to carry fatter yields when the Federal Reserve begins raising rates, are popular as they already offer significantly higher yields than comparable German or Japanese debt.

On Monday, German 10-year Bund yields, which set the pace for euro zone borrowing costs, fell below 0.30 percent for the first time before rebounding to 0.377 percent, according to Thomson Reuters data.

Benchmark 10-year notes were down 6/32 in price to yield 1.81 percent. Shorter maturities were generally off in price, with the five-year down 8/32 in price and yielding 1.39 percent.

The yield curve between five-year notes and 30-year bonds flattened to 105 basis points from 106.30 late on Friday. It has averaged about 126 basis points over the last three months, according to Thomson Reuters data.

Traders and portfolio managers expect few market ripples from this week's meeting of Fed policymakers scheduled to begin on Tuesday, according to Brien.

"This is kind of a placeholder meeting," Brien said. "They have said nothing much was going to happen at these next two meetings. Nothing much has altered from the trends that were in place to make the Fed issue any sort of dramatic statement."

Oil prices slid in early trade on Monday, with U.S. crude falling close to a six-year low, after the Greek election sent the euro to new 11-year low against the dollar. In Greece, stocks fell as much as 5 percent, while Greek bond yields spiked to 8.95 percent on the news.

In Germany, Bundesbank President Jens Weidmann said he hoped, "the new Greek government will not make promises it cannot keep and the country cannot afford," according to Reuters.

Read MoreSyriza faces 'uphill battle' in coming hours

On the data front, there are no major releases on Monday, but, investors will be eyeing Wednesday's conclusion of the latest Federal Reserve policy meeting. Policy and forecasts are likely to remain unchanged, but given the further drop in the oil price since the Committee met in mid-December, the post-meeting statement will be closely watched.

In equity markets, investors will also be watching for major fourth- quarter earnings, including Microsoft and Texas Instruments after the bell.