Treasury prices were under pressure Tuesday, keeping 10-year note yields near 5-month highs, before the government sells $35 billion in 3-year notes, the first of three big note and bond auctions this week.
Yields on 10-year notes , which move in the opposite direction of prices, increased 1 basis points to 3.16%, still near their highest level since November. A basis point is 0.01%.
Two-year note yields rose 2 basis points to 0.96%.
The 3-year sale is the same size as last month. Bids are due at 1:00 p.m. Eastern time.
The current 3-year note yield rose 2 basis points to 1.41%.
Traders tend to sell existing holdings to have cash to bid at auctions for the newest, most liquid securities.
Analysts are closely watching how much demand the sale receives, especially from foreign investors, given the holiday week in Japan, said Kevin Giddis, managing director of fixed income for Morgan Keegan & Co.
Already Monday, the government sold $28 billion in 4-week bills at a rate of 0.145% and $26 billion in 52-week bills at 0.530%.
Those will be followed by the sale of $22 billion in 10-year notes on Wednesday and $14 billion in 30-year bonds on Thursday.
Treasurys remained lower after the Institute of Supply management's survey of non-manufacturing businesses rose more than analysts expected to 43.7 in April, from 40.8 the previous month. Readings below 50 indicate the industry is contracting. See Economic Report on ISM report.
Federal Reserve Chairman Ben Bernanke said the economy is bottoming out and may improve later this year if the gradual repair of the banking system continues. He spoke in testimony to Congress.
