* Benchmark yields climb from 14-month lows
* Safe-haven bids persist on worries about Ukraine,
* Investors prepare for $67 bln August U.S. refunding
By Richard Leong
NEW YORK, Aug 11 U.S. government debt yields
edged higher on Monday from their recent lows as traders trimmed
safe-haven bond holdings and stepped back into stocks on hopes
of reduced tensions in the Middle East.
Benchmark 10-year yields retraced from last week's 14-month
lows on a 72-hour truce between Israelis and Palestinians as
both sides sought to end their month-old war in Gaza.
U.S. airstrikes in Iraq aimed at curbing Islamic State
militants who have taken over large swaths of that country also
pared safe-haven bids for Treasuries.
"We have been largely driven by geopolitical events despite
improving domestic (economic) data," said Larry Milstein, head
of government and agency trading at R.W. Pressprich & Co in New
In spite of developments that could eventually end the
violence in Gaza and Iraq, investors remained nervous about the
fighting in Ukraine and how soured relations between Russia and
the West might hurt the global economy.
Benchmark yields held just above their 14-month lows
following comments by Fed Vice Chairman Stanley Fischer, who
said earlier on Monday that the United States' subpar recovery
since the financial crisis has stemmed from a variety of
factors, including declining productivity and sluggish global
Traders perceived his speech at a conference in Sweden as
implying that the U.S. central bank would not increase interest
rates until the second half of 2015 at the earliest.
On below-average volume, the yield on U.S. 10-year
Treasuries notes was last 2.431 percent, up 1.6
basis points on the day. On Friday, it fell to 2.349 percent, a
level not seen since June 2013.
Wall Street share prices opened higher, with the Standard &
Poor's 500 index last up 0.45 percent.
On the supply front, the U.S. Treasury Department will begin
its $67 billion refunding later this week, which is estimated to
raise $9.3 billion in cash for the federal government.
The Treasury will sell $27 billion of three-year debt on
Tuesday ; $24 billion in 10-year notes on
Wednesday and $16 billion of 30-year bonds on
In the "when-issued" market, the upcoming three-year note
issue due August 2017 was quoted to sell at a yield of 0.9250
percent, which would be the lowest in four months.
Separately, the Fed will not buy Treasuries on Monday. It
will resume its purchases on Tuesday with a planned $950 million
to $1.15 billion in bonds due in 2036 to 2044.
(Reporting by Richard Leong; Editing by Jonathan Oatis)