New York: Treasuries fell, with 10-year notes dropping for the first week this year, as the government sold a record-tying $81 billion (Dh297.4 billion) in notes and bonds and Europe's pledge to aid Greece dulled the haven appeal of US debt.
Ten-year and 30-year yields rose the most in seven weeks as sales of the securities drew lower-than-average demand.
The European Union said it was prepared to take action to support Greece, while leaving open how it might respond to a fresh wave of speculative attacks against member nations that are also struggling to cut deficits. US consumer prices rose in January, a report is forecast to show this week.
"With all of the issues the EU had with the PIGS one would think we would see a continued flight to quality," said Thomas L. di Galoma, head of US rates trading at Guggenheim Partners, a New York-based brokerage for institutional investors. He used an abbreviation for Portugal, Ireland, Greece and Spain.
The yield on the benchmark 10-year note climbed 13 basis points, or 0.13 percentage point, the most since the five days ended December 25, to 3.69 per cent on the week. It touched 3.76 per cent on February 11, the highest level since January 14.
The 30-year bond yield increased 13 basis points to 4.65 per cent. It touched 4.71 per cent on February 11, also the highest since January 14.
The United States sold $40 billion of three-year notes, $25 billion of 10-year notes and $16 billion of 30-year bonds, drawing yields of 1.377 per cent, 3.692 percent and 4.720 per cent, respectively. All of the yields were higher than forecasts in Bloomberg News surveys of bond-trading firms.
The 30-year bond offering's bid-to-cover ratio, which gauges demand by comparing the amount bid with the amount offered, was 2.36, compared with an average of 2.48 at the previous 10 sales. The bid-to-cover ratio at the 10-year note auction was 2.67, versus an average of 2.76.
Direct bidders, non-primary dealers that bid on their own accounts, bought 24.1 per cent of the 30-year securities, the most in at least five years.
A higher yield at the auction than in pre-market trading may have cost the Treasury as much as $61.6 million in interest over the life of the debt, according to Bloomberg data.
"Bidders felt no compulsion to bid through the market to purchase supply," Chris Ahrens, head of interest-rate strategy at UBS AG, Connecticut, wrote in a note to clients.