US bonds range-bound as month ends; Friday’s NFP awaited

U.S. sovereign bonds fell on Tuesday, with yields range-bound as the month draws to a close.

Benchmark 10-year notes (U.S.:US10Y) rose to yield 1.5740 percent, up from 1.566 percent at the market close on Monday. Bond yields move inversely to prices.

"August seems set to end without 10-year Treasury yields breaking from their suffocating 15 basis point-range. They're a couple of basis point lower this morning, although that has stopped the post-Jackson Hole mood persisting with the yen (Exchange:JPY=) a little softer, the dollar a little stronger pretty much across the board," Kit Juckes, strategist at Societe Generale, said in a note on Tuesday.

Thirty–year bonds (U.S.:US30Y) rose to yield 2.2331 percent, having ended at 2.216 percent on Monday.

Economic data due on Tuesday include consumer confidence for August and the Case-Shiller home price index for June. It is important for the U.S. Federal Reserve that consumer confidence remains strong if it wishes to raise interest rates shortly, but the official payrolls data due this week will be the more important indicator.

The U.S. dollar continued to rise against a basket of major currencies (Intercontinental Exchange US: .DXY) early on Tuesday.

"Month-end looms and with Friday's nonfarm payrolls following on hard behind, we may see a reflective mood rather than dramatic action. But it's the tiny Treasury range that catches the eye and suggests volatility will be kept firmly anchored; investors will struggle to resist the siren call of yield and emerging markets and the dollar is unlikely to fly too high," Juckes said.

The Treasury will auction $45 billion in four-week bills on Tuesday.

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