U.S. sovereign bond prices were mixed on Monday, after the Treasury Department auctioned $26 billion in 2-year notes at a high yield of 0.760 percent on Monday.
The bid-to-cover ratio, an indicator of demand, was 2.52, well below a recent average of 2.96.
Indirect bidders, which include major central banks, were awarded 29.9 percent, well below a recent average of 47.2 percent. Direct bidders, which includes domestic money managers, bought 10.3 percent, also below a recent average of 16.1 percent.
The yield on the 2-year Treasury note sat higher at 0.7353 after the note sale. Meanwhile, the yield on the benchmark 10-year sat lower at 1.5766 percent. Yields move inversely to bond prices. Thirty-year bonds yielded 2.2922 percent on Monday.
Strategists at BBH led by Marc Chandler forecast the yield on 10-year notes will pull back into a 1.48-1.53 percent band.
"Given the string of U.S. upside data surprises, it seems increasingly difficult to read into the low long-term U.S. yields as a signal of a looming recession. In particular, as more bonds break through the zero- threshold, the more attractive U.S. Treasurys appear," they said in a note on Sunday.
There is a dearth of major U.S. economic data on Monday, with new home sales out on Tuesday and durable goods orders and the Federal Reserve interest rate decision on Wednesday.
"The Fed is overwhelmingly expected to keep the Federal Funds Rate unchanged at 0.25-0.50 percent," Emily Nicol, economist at Daiwa Capital Markets, said in a note on Monday.
"Likely of more interest will be the post-meeting press statement, which will be watched closely for the Committee's assessment of post-UK-referendum risks and therefore any hints about the likely timing for future rate increases," she added.
Hillary Clinton is expected to be formally nominated as the Democratic presidential candidate at the party's convention, which starts on Monday in Philadelphia.