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Bond Prices See More Losses After 'Horrible Auction'

US government bond prices extended losses after an auction of new 10-year notes attracted scant demand from both primary dealers and indirect bidders.

Treasurys were already lower following a paring of losses in the stock market. The new 10-year notes were met with bids for just 1.79 times the $10 billion on offer, down sharply from the last auction's 2.34.

Indirect bidders, considered a proxy for foreign buying, took home a minuscule $575.7 million, or 6 percent of the auction total.

"That's a horrible auction," said T.J. Marta, fixed income strategist with Royal Bank of Canada Capital Markets in New York.

Benchmark 10-year notes were down 24/32 and offering a yield of 3.53 percent. Two-year notes were down 1/32 for a yield of 1.62 percent, up two basis points.