Treasury yields rose on Monday after the government's sale of two-year notes, the first part of this week's $90 billion in fixed-rate U.S. debt supply.
The Treasury Department auctioned $26 billion in two-year notes at a high yield of 0.540 percent—the lowest since January. The bid-to-cover ratio, an indicator of demand, was the weakest since December at 3.30. That was a bit light of the recent average of 3.42.
In the "when-issued" sector, traders had expected the notes due in April 2017 to fetch a yield of 0.5480 percent.
Direct bidders, which includes domestic money managers, brought 15 percent, which was unchanged from the recent average. Indirect bidders, which include major central banks, were awarded 38 percent, also unchanged from the recent average.
Benchmark 10-year Treasurys note yields were at 1.923 percent, up 1 basis points from Friday, while two-year note yields rose 2 basis points to 0.52 percent.
Prices declined earlier as traders were reluctant to make big bets ahead of the two-day Federal Reserve policy meeting that begins on Tuesday.
Analysts expected no change in policy stance from the Federal Open Market Committee as recent domestic data have been weaker than forecast and a strong dollar has crimped export activities.