US Treasurys lower after 2-year notes sale; Yellen, Brexit vote eyed

U.S. sovereign bond prices were lower as investors awaited testimony by Federal Reserve Chair Janet Yellen and tread lightly ahead of Britain's EU referendum set for later this week. Investors also digested fresh supply into the market.

The Treasury Department auctioned $26 billion in two-year notes at a high yield of 0.745 percent on Monday.

The bid-to-cover ratio, an indicator of demand, was 2.72.

Indirect bidders, which include major central banks, were awarded 47.4 percent. Direct bidders, which includes domestic money managers, bought 9.9 percent.

The yield on the 10-year Treasury note, which moves inversely to its price, moved higher to 1.6671 percent, while the yield on the 30-year Treasury bond was up at 2.4718 percent. Two-year note yields also traded higher, at 0.7289 percent.

US 10-YR
US 30-YR

Investors have been on edge in the run-up to Britain's June 23 referendum which will ask voters whether the U.K. should remain a member of the European Union. Favorable polling results for the remain camp at the weekend have spurred "risk-on" sentiment across the globe.

Meanwhile, Federal Reserve watchers are also poised for Chair Janet Yellen's testimony in front of the U.S. Senate Committee on Banking, Housing and Urban affairs set for Tuesday. As well as her testimony in front of the House of Representatives' Committee on Financial Services slated for Wednesday.

Minneapolis Fed President Neel Kashkari said regulators may hurt the economy and push borrowers toward non-bank lenders if they set too-high capital standards for Wall Street.

The U.S. banking system needs deep reform to prevent a repeat of the 2008 financial crisis and Wall Street firms should hold more capital to brace against economic shocks, said Kashkari, who was a Treasury Department official under the George W. Bush administration.

No major economic data are expected.

— Reuters contributed to this report.