Most US Treasuries were steady on Tuesday after the US Treasury Department saw solid demand for its $34 billion sale of five-year notes, the second sale of $88 billion in new supply this week. The government sold the five-year notes at a high yield of 1.76 percent, less than half a basis point higher than where the debt traded before the auction.
Indirect bidders, which include fund managers and some central banks, bought 60 percent of the sale, around average, after they reduced their participation in a $26 billion sale of two-year notes on Monday.
"People had it pretty well priced, the market didn't budge when the results came out," said Lou Brien, a market strategist at DRW Trading in Chicago.
New supply has weighed on shorter-dated debt, with investors increasingly nervous about likely interest rate hikes.
Treasury yields have soared since the election of Republican Donald Trump as US president on November 8 as investors bet he will adopt policies that increase spending and spur higher growth and inflation, which could also lead the Federal Reserve to raise interest rates more times than previously expected. Two-year note yields rose as high as 1.107 percent earlier, the highest level since April 2010, before falling back to 1.08 percent. The yields have soared from 0.81 percent before Trump's victory. Five-year note yields were trading just below 11-month highs, at 1.78 percent.
On Wednesday, the government will sell $28 billion in seven-year notes.
US Treasury prices had gained in overnight trading after a powerful earthquake rocked Japan early on Tuesday, provoking some buying of safe-haven assets.
Benchmark 10-year note yields ended little changed on the day to yield 2.32 percent.
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