Treasury Department auctions $24B of 3-year notes at a high yield of 1.056%


The Treasury Department auctioned $24 billion in three-year notes at a high yield of 1.056 percent on Tuesday. The bid-to-cover ratio, an indicator of demand, was 3.23.

Benchmark 10-year Treasury note yields touched session high of 2.20 percent after the announcement and was last at 2.19 percent. The yield on the three-year note was last at 1.035 percent hitting a peak of 1.049 percent after the sale.

U.S. Treasury yields crept higher earlier, pushing prices down as a generally firm tone in global stock markets dented the appeal of safe haven debt.

U.S. markets re-open after Monday's Labor Day holiday, with focus returning to the outlook for China's economy after data pointed to further signs of weakness. China's dollar-denominated exports declined by 5.5 percent year-on-year in August; imports tumbled 13.8 percent.


At the short end of the yield curve, two-year notes were yielding about 0.74 percent, compared with around 0.7 percent on Friday.

Long-dated U.S. Treasury prices rose on Friday after the August non-farm payrolls report boosted expectations for the Federal Reserve to raise interest rates when it meets later this month.

Analysts said a rate rise is seen containing inflation, boosting the appeal of longer-dated bonds.

Still, with U.S. stocks opening higher on Wall Street and European and Asian stock markets mostly higher, bond prices edged down on Tuesday.

"It should be a quiet start to the working week in the U.S. with just the latest consumer credit figures and Fed's composite labour market indicator due," analysts at Daiwa Capital Markets said in a note.