US Treasury yields advanced on Monday in thin trading as risk sentiment improved and Wall Street shares trimmed losses, with the overall bond market in consolidation mode after volatile moves in the last two weeks.
President Donald Trump's comments on Monday that he was not looking to declare a national emergency amid a partial government shutdown along with upbeat remarks on the economy from Fed Vice Chairman Richard Clarida helped boost risk appetite, analysts said.
Investors less concerned about risk find other assets more attractive compared to the safety of Treasury securities.
"Risk sentiment has been recovering ... and to a certain extent equities have been retracing some of their losses," said Gennadiy Goldberg, US rates strategist at TD Securities in New York.
Earlier in the session, yields on US 10-year and 2-year notes fell to one-week lows on soft Chinese and European economic data.
TD's Goldberg said the improved risk appetite could be related to Trump's comments on the shutdown.
Trump can declare a national emergency because of the shutdown but on Monday he said he is not looking to do so.
The US government shutdown dragged on for a 24th straight day over an impasse on building Trump's border wall that he said is meant to protect the country against illegal immigrants and drugs.
UBS Global Wealth Management in a research note on Monday said it believes the shutdown is unlikely to have a substantial economic or market impact in the near term, but the partisan nature of US politics could pose a risk of a more significant clash over the debt ceiling later this year.
Analysts also said Clarida's comments on Monday that he does not expect a recession on the horizon also helped the risk-off mode in the market. Clarida also said the Fed can afford to be patient with monetary policy in 2019.
In afternoon trading, US 10-year note yields rose to 2.707 percent, up from 2.699 percent late on Friday.
US 30-year bond yields, were also up at 3.06 percent, from 3.036 percent on Friday.
On the short end, US 2-year yields were down on the day at 2.536 percent, compared with Friday's 2.545 percent.
Treasury yields fell earlier in the session after data from China showed imports fell 7.6 percent year-on-year in December and euro zone industrial output slid in November by more than expected.
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