By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) -- Treasury prices edged lower on Monday, pushing yields up and giving back some of the big gains notched Friday on a combination of fears about Hungary's financial health and a weak U.S. payrolls report.
With no major economic data on tap, traders eyed this week's trio of note and bond auctions totaling $70 billion.
Yields on 10-year notes (UST10Y 3.22, +0.01, +0.28%) , which move inversely to prices, rose 3 basis points to 3.24%. A basis point is 0.01 percentage point.
Yields on 2-year notes (UST2YR 0.75, +0.02, +2.74%) increased 3 basis points to 0.76%.
On Friday, 10-year yields fell by the most since May 2009 and the euro dropped below the key level of $1.20 for the first time since late March 2006. See Friday's Bond Report.
The Treasury Department will auction $36 billion in 3-year notes (UST3YR 1.18, +0.02, +1.64%) on Tuesday, followed by $21 billion in 10-year debt the next day. Another $13 billion in 30-year bonds (UST30Y 4.15, +0.01, +0.31%) will be sold on Thursday.
"Expect some backing up of Treasurys with supply being the catalyst," said John Spinello, Treasury strategist at Jefferies & Co.
When yields have been near these low levels for recent auctions, the auctions have drawn less interest from more yield-sensitive investors, he noted.
Also weighing on bonds Monday, the euro (CUR_EURUSD 1.1943, +0.0001, +0.0084%) has recovered against the dollar from its worst levels of the session as some worries about Hungary's debt eased. Read about euro, dollar.
"The Treasury market is still focused on the sovereign-debt crisis as well as the weakness of the euro and the potential of another dip in economic activity," said Tom di Galoma, head of U.S. rates trading at Guggenheim Partners.
Over the weekend, Hungary's State Secretary Mihaly Varga said the country's economic situation is stable and recent comments about a possible default were "unfortunate." See more on Hungary.
The nation will stick to its goal for reducing its budget deficit, Varga said.
