U.S. Treasury prices bounced after a successful three-year note auction Monday, after having stalled into a range earlier in front of a batch of auctions, coming key data and the expected rate hike out of the Federal Open Market Committee (FOMC) meeting Wednesday. The market will need to digest the1 p.m. ET $20 billion reopened 10-year notes and $12 billion reopened 30-year bonds Tuesday (versus a usual three day schedule) on top of the completed $24 billion three-year note sale.
The 30-year yield recently traded lower, near little-changed at 2.85% from a 2.874% high and 2.853% close Friday.The 10-year yield dropped to 2.195% against a 2.225% high and 2.20% close. The five-year yield was hit back to 1.7948% from a 1.79% high from a 1.763% close. The two-year yield has lagged, trading near 1.34% from a 1.37% high and 1.335% close. The curve trade remained on a flatter slope with the two- and 10-year yield spread tightened to 85 from 86 while the five- and 30-year yield gap narrowed to 108.2 from 109.