* Benchmark 10-year yields up ahead of week's 3 Treasury
* Benchmark yields hit 15-day low before reversing course
By Dion Rabouin
NEW YORK, Feb 7 U.S. Treasury yields hit their
lowest in more than two weeks before turning higher in early
North American trading on Tuesday as investors sold bonds ahead
of auctions for 3-, 10- and 30-year Treasuries this week.
Growing political uncertainty in Europe helped increase bond
buying overnight as Treasury prices rose in concert with
European bonds. The latest twists in the French presidential
election race and doubts over a rescue package for Greece also
stoked concerns over the future stability of the euro zone.
The long end of the Treasury curve was seeing the most
selling as investors positioned for the 10- and 30-year Treasury
auctions later this week.
"Leading into today you had pretty decent rally yesterday
and we're pretty significantly lower in yield than we were on
Friday too, so I think it's just a little concession coming into
the supply," said Thomas Simons, money market economist at
Jefferies & Co.
Uncertainty over U.S. President Donald Trump's
campaign-trail promises of pro-growth policies sent yields lower
on Monday. Now in the third week of his presidency Trump's plans
to cut corporate taxes and boost infrastructure spending have
yet to be fleshed out, and analysts said the risk was increasing
that the plans would fade further into the background.
While the 3-year auction was slated for Tuesday, ahead of
the 10- and 30-year auctions, there is greater risk for a weak
auction in longer-dated maturities, Simons said.
"The 3-year area of the curve, that type of supply is easier
to take from a duration perspective. The long end needs a little
more concession coming into new auctions because it is a lot of
duration hitting the market at once," he added. "Three years
are more of a routine affair, whereas pricing on 10s and 30s can
get more interesting."
Benchmark 10-year Treasury notes were down 4/32
in price to yield 2.43 percent.
The U.S. Treasury plans to auction $24 billion of 3-year
notes at 1 p.m. (1800 GMT)
(Reporting by Dion Rabouin; Editing by Andrea Ricci)