U.S. Treasury debt prices edged higher on Monday after the Treasury’s auction of two-year notes saw strong demand, but low volume and a lack of market-moving economic data capped gains.
Overall bidding, measured by the bid-to-cover ratio, came in at 3.71 in the Treasury’s sale of $28 billion in two-year notes. That marked the highest level since December and helped push benchmark and 30-year Treasury yields, which move inversely to prices, to one-week lows.
“It’s certainly very difficult to interpret it as a hawkish vote on Fed policy,” said Ian Lyngen, senior government bond strategist at CRT Capital in Stamford, Connecticut, on the strong bidding at Monday’s auction.
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