US Treasuries prices rose on Monday, with the 30-year bond leading the rally for much of the day, as oil prices fell on swelling oversupply, dragging stocks down and stoking interest in safe-haven US government debt. Prices on US Treasuries had slumped on Friday as a resurgence in oil and stock prices drove selling of the debt, but oil prices fell more than 5 percent on Monday on worries about oversupply after Iraq announced that its oil production last month was at a record-high.
"Treasuries rallied overnight and have been bouncing around in a pretty tight range since then and that's paralleled by what's going on in oil," said Tom Simons, money market strategist at Jefferies & Co in New York. Weaker-than-expected IFO data from Germany also boosted investor appetite for US government debt, as did disappointing Japanese export and import data.
In recent weeks, against a backdrop of volatile trading in global stocks, Fed officials have shrugged off the impact of financial market swings on their decisions. While investors expect the Fed's message to remain unchanged, they hope to hear whether global market volatility and weakness seen for much of January will prompt the central bank to adjust its plans for rate increases this year.
The Treasury Department began the week's sale of $67 billion with a $34 billion auction of 13-week bills and a $28 billion auction of 26-week bills. The 2-year note was last flat at a yield of 0.873 percent, little changed from 0.869 percent on Friday. The benchmark 10-year note was last up 8/32 in price to yield 2.020 percent, down from 2.048 percent late on Friday. The 30-year bond was last up 13/32 in price to yield 2.799 percent, down from 2.821 percent late on Friday.