NEW YORK, March 26 (Reuters) - U.S. Treasury yields rose on Monday as the government planned to sell a record high $294 billion of debt this week, in a test of investor appetite following last week's strong run spurred by nervousness about a global trade war. The U.S. Treasury Department will sell $51 billion of three-month bills and $45 billion of six-month bills at 11:30 a.m. (1530 GMT), followed by $30 billion of two-year notes at 1 p.m. (1700 GMT) on Monday. "The Treasury market is trading lower this morning as traders begin to discount whether there will be an actual 'trade war' or if it will be averted, especially with China," said Kevin Giddis, head of fixed income capital markets at Raymond James in Memphis, Tennessee. On Friday, China urged the United States to "pull back from the brink" after Trump said he planned tariffs on up to $60 billion in Chinese goods, and the Chinese commerce ministry warned that the country "doesn't hope to be in a trade war, but is not afraid of engaging in one." Bloomberg News cited Chinas ambassador to the United States saying that the country was looking at all options in response to tariffs, which could include scaling back purchases of Treasuries. At 10:11 a.m. (1411 GMT), the yield on benchmark 10-year
Treasury notes was 2.841 percent, up over 1 basis
point from late Friday.
(Reporting by Richard Leong; Editing by Andrew Hay)