US Treasurys edge lower as investors gear up for potential rate hike

Washington (Mar 6)  US government debt prices were lower on Monday as investors eyed a potential interest rate hike this month.

The yield on the benchmark 10-year Treasury notes (U.S.:US10Y), which moves inversely to price, was higher at around 2.496 percent, while the yield on the 30-year Treasury bond was also higher at 3.103 percent.

Federal Reserve Chair Janet Yellen signaled a U.S. interest rate would be likely this month with the Federal open Market Committee scheduled to meet on March 14-15.

On the data front, January factory orders rose 1.2 percent, more than the expected gain of 1 percent.

Overseas, investors prepared for a European Central Bank meeting scheduled for Thursday, and the ECB is unlikely to beef up its lending of government bonds.

Sources at euro zone central banks said political, legal and technical hurdles were still standing in the way of industry calls for them to lend out more of the 1.4 trillion euros ($1.48 trillion) of sovereign debt they have bought to boost inflation.

ECB policymakers opened the door to changes at their January meeting after a bond shortage late last year saw investors pay record rates to borrow government paper, for example to post as collateral at the clearing houses which settle their trades.

The 10-year German bund yield declined to about 0.342 percent, while U.K. 10-year debt yielded 1.21 percent.

Source: Reuters