19.09.201700:34:00UTC+00U.S. Yields Extends Rally as Markets Await Fed Meeting

U.S. Treasury prices retreated on Monday, driving up yields as traders shed their holdings of government debt before a Federal Reserve policy meeting that is anticipated to start the reduction process of the U.S. central bank's massive balance sheet.

Yield on the 10-year Treasury note rose 2.8 basis points to 2.30 percent, continuing its longest stretch of yield gains since March 9. The 30-year bond yield also advanced 3 basis points to 2.804 percent against the 2.772 percent on Friday.

The two-year Treasury note yield slightly rose at 1.393 percent, after ending at 1.384 percent last Friday.

The selling pressure in the bond market increased as investors continue to clock out of safe-haven assets towards riskier assets such as stocks. U.S. stock indexes recorded new highs again on Monday, while the Japanese yen and gold, both perceived as safe-haven, weakened.

Bond bulls retreated last week as investors dismissed concerns that previously pushed down the benchmark note's yield below 2.10 percent, such as the geopolitical tensions surrounding North Korea's nuclear activities and the repercussions from Hurricane Harvey and Irma.

Traders are now on standby and looking forward to the FOMC's meeting, which is expected to mark the beginning of the winding down of the Fed's balance sheet.