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US Treasurys hold higher after 2-year notes sale

U.S. Treasury notes traded higher on Monday after a two-year notes auction, as investors turned nervous ahead of the debate between U.S. presidential candidates and kept an eye on the OPEC meeting in Algiers.

The Treasury Department auctioned $26 billion in two-year notes at a high yield of 0.750 percent on Monday. The bid-to-cover ratio, an indicator of demand, was 2.65.

Indirect bidders, which include major central banks, were awarded 36.9 percent. Direct bidders, which includes domestic money managers, bought 19 percent. Two-year notes yielded about 0.73 percent after the auction.

Symbol
Yield
 
Change
US 3-MO
---
US 2-YR
---
US 5-YR
---
US 10-YR
---
US 30-YR
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Benchmark 10-year notes rose to yield 1.58 percent, having yielded 1.615 percent at the previous session's close. Bond yields move inversely to prices. Earlier in the session, the yield on U.S. 10-year notes hit a low of 1.574 percent, its lowest since Sept. 8.

Thirty-year notes yielded 2.3177 percent.

Crude oil prices gained on Monday, after media reports cited the Algerian energy minister saying all options were possible for an output cut or freeze among members of the oil-producing cartel OPEC. That came ahead of this week's meeting of major oil-producing countries in Algeria.

Globally, investors are also watching the upcoming debate between U.S. presidential candidates Hillary Clinton and Donald Trump on Monday evening. Recent polls have shown the two candidates deadlocked ahead of the election in November.

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The week will be a heavy one for U.S. sovereign bond issuance. The Treasury will sell $34 billion of five-year notes on Tuesday and $28 billion of 7-year notes and $13 billion of 2-year floating-rate notes on Wednesday.

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