By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices fell for the first day in four on Tuesday, pushing yields up from their lowest level in about five weeks ahead of the government’s first of three big auctions this week.
Yields on 10-year notes 10_YEAR +0.59% , which move inversely to prices, rose 1 basis point to 1.52%. They fell to 1.50% earlier, their lowest level since June 1.
Yields on 30-year bonds 30_YEAR +0.38% increased 1 basis point to 2.63%, also up from their lowest since early June.
Five-year note yields 5_YEAR +0.47% were little changed at 0.63%.
Yields on 10-year notes faced technical resistance around 1.55%, but broke below that Monday on low trading volume, noted analysts at CRT Capital Group.
Simply staying below that level after Friday’s nonfarm payrolls report “does suggest that we’re accepting at least these modest gains,” CRT’s David Ader and Ian Lyngen wrote in a note. “So we err again to calling for a revisit to 1.44% or so as the cycle low” which is right around the all-time low for the security.
The Treasury Department will auction $32 billion in 3-year notes 3_YEAR +0.84% at 1 p.m. Eastern time.
The short-term securities could face a difficult auction as last month’s sale received very weak foreign demand and other auctions have shown dealers less interested in the maturity, analysts at Nomura Securities said.
With the Federal Reserve continuing to sell their holdings of shorter-dated debt through the end of the year, that will increase the supply of the notes at the same time, they said.
As for positives for the auction, euro zone event risk remains on the horizon, which keeps demand for liquid, short-duration instruments reasonably strong,” they said.
On Monday, U.S. yields fell as worries about Spain escalated and pushed yields on Spanish 10-year debt over 7%. Read more in Monday’s Bond Report.
Deborah Levine is a MarketWatch reporter, based in New York.
