Bonds rally after yellen revive market expectations for mid year interest hike

Treasury bonds were boosted on Monday, following the release of somewhat disappointing U.S. housing data.

U.S. equities rose and bond yields fell after U.S. Federal Reserve Chair Janet Yellen said on Tuesday it would be several months before the Fed expects to boost interest rates, while European equity markets gained after Greece locked in a four-month extension of its financial rescue programme.

In recent trading, the yield on the benchmark 10-year Treasury note was 2.070%, compared with 2.136% on Friday. Yields fall as bond prices rise. The greenback jumped initially but paired gains and was down 0.1 percent against a basket of currencies (.DXY).

Yellen is scheduled to testify before the Senate banking committee in her semi-annual report on monetary policy today, and will appear before the House Financial Services Committee on Wednesday.