Treasury yields slightly up

US Treasury yields drifted higher on Monday as Wall Street stocks recovered, but trading was mostly rangebound as investors digested the Brexit turmoil and its impact on other assets after Britain's Prime Minister Theresa May postponed a parliamentary vote on her deal to exit the European Union. Following May's decision, US 30-year yields dropped to three-month lows, while those on benchmark 10-year notes slid to their lowest since late August, as UK 10-year yields fell to 1.16 percent. That was the lowest since late May.
US yields were mostly back up in afternoon trading, except for 30-year bonds.
May said she was delaying a planned vote on Tuesday on her Brexit deal as she expected it to be rejected.
Lou Brien, market strategist at DRW Trading in Chicago, said the earlier rally in Treasuries was related to Brexit.
"Part of the weakness in stocks which has affected Treasuries is technical in nature, and part of it is the incredible uncertainty in the UK, which has added to the already uncertain situation here in the US," he added.
US stocks have recovery modestly in the afternoon, fueling a mild sell-off in Treasuries.
"The improvement in equities is...allowing some concessions into the $78 billion in coupon auctions that begin Tuesday with the $38 billion 3-year sale," said Action Economics on its website.
In a concession, investors typically sell Treasuries ahead of an auction to push the yield higher so they can buy them at a lower price.
Aside from the US three-year note sale on Tuesday, the US Treasury is set to auction $24 billion in 10-year notes on Wednesday, and $16 billion in 30-year bonds on Thursday.
Also on Monday, the 5-year and 30-year yield curve flattened somewhat, after two sessions of steepening. The flatter yield curve reflects growing uncertainty about geopolitical risks, analysts said.
On the economic front, analysts are looking to US inflation data this week, which could determine the pace of future rate hikes.
Since late October, 10-year yields have fallen more than 20 basis points amid a mixed set of economic data, the latest being a weaker-than-expected US non-farm payrolls report.
Stan Shipley, fixed income strategist, at Evercore ISI in New York said he still expects the Federal Reserve to raise interest rates at next week's monetary policy meeting, but after that, it is anybody's guess.
In afternoon trading, US 10-year note yields were up at 2.853 percent, from 2.85 percent late on Friday. Earlier, they fell to a near four-month low. US 30-year bond yields, however, fell to 3.127 percent, from 3.143 percent on Friday, after earlier dropping to 3.103 percent, a three-month trough.