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US Treasury yields rise after sale

A trader signals offers in the Standard & Poor's 500 stock index futures pit at the CME Group in Chicago.
Getty Images
A trader signals offers in the Standard & Poor's 500 stock index futures pit at the CME Group in Chicago.

The Treasury Department on Tuesday auctioned $24 billion in 3-year notes at a high yield of 1.255 percent.

U.S. sovereign bonds yields moved higher following the sale and after oil prices fell to fresh record lows on Monday.

For the auction, the bid-to-cover ratio, an indicator of demand, was 3.14. Indirect bidders, which include major central banks, were awarded 47.4 percent. Direct bidders, which include domestic money managers, brought, 18.6 percent.

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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Yields on 10-year Treasurys were at 2.2332 percent on Tuesday, after closing at 2.225 percent on Monday.

Meanwhile, 30-year bond yields traded at 2.9703 percent after ending at 2.949 percent in the previous session. Three-year notes yielded 1.2309 percent.

The Treasury Department on Tuesday sold $45 billion of one-month bills at an interest rate of 0.235 percent, the highest since October 2013. It also auctioned 1-year bills at a rate of 0.74 percent, the highest since November 2008.

Earlier, crude prices edged up from nearly seven-year lows on Tuesday as China reported strong commodity imports despite economic weakness but, overall, the market remained weak due to global oversupply compounded by the Organization of Petroleum Exporting Countries' decision to keep output high.

Brent futures and U.S. crude both fell more than 5.5 percent the previous session to reach 2015 lows, and they are closing in on levels last seen during the credit crunch of 2008 and 2009. Should they break through those lows, the next downward target would be levels not seen since the early 2000s.

Internationally traded Brent futures were down 14 cents at $40.59 a barrel on Tuesday, and briefly broke below $40. U.S. crude settled 14 cents lower at $37.51 a barrel. At one point in the session, it touched lows not seen since 2009.

Spot iron ore also fell to a fresh decade low below $40 a ton.

Ahead of next week's key Fed policy announcement — which seems bound to bring the first hike in the fed funds rate since 2006 — this week's U.S. data highlights come on Friday with November retail sales figures, which are expected to report a further modest increase.

Markets are prepping for a rate hike December 16, after Friday's 211,000 November nonfarm payrolls showed a continuing solid trend of job creation.