NEW YORK (MarketWatch) -- Treasurys were little changed early Monday ahead of Federal Reserve Chairman Ben Bernanke's testimony to Congress.
Two-year notes yielded 1.64%. Yields move in the opposite direction of prices.
Bernanke is scheduled to address the House Banking Committee about the economic outlook and financial markets beginning at 10 a.m. Eastern.
He "might provide some insights regarding how policymakers will seek to mitigate the economic downturn and fund the rising budget deficit," said T.J Marta, fixed-income strategist at RBC Capital Markets.
U.S. debt was also under pressure as U.S. equity futures headed higher and short-term lending rates dropped, signaling a thawing of the credit freeze.
The London interbank offered rate, or Libor, for three-month dollar loans fell to about 4.06%, down sharply from 4.42% on Friday. See full story.
Libor, which is used as a benchmark for company and consumer loans, remains abnormally high, but has descended down from peaks set earlier this month as financial institutions all but halted loans to each other amid fears of further bank failures.
Traders are also concerned about increasing issuance of Treasury debt in the pipelines.
The government will announce later this week how much in and five-year inflation-indexed securities it will auction next week. It also will sell its regularly-auctioned short-term bills as well as an unknown amount of supplementary short-term debt to finance transfers to the Fed for its operations to liquefy financial markets.
Finally, the Treasury Department is expected to again increase the amount of two-year notes, five-year notes it sells at the end of the month.
