U.S. Treasury yields rebound as investors await economic data and Fed minutes

U.S. Treasury yields rebounded on Monday following their sharp sell-off last week as investors awaited the release of new economic data and notes from the Federal Reserve's September meeting.

The benchmark 10-year Treasury up nearly 3 basis points to 5.303%. The 30-year Treasury bond was also about 3 basis points higher at 5.663%. The yield on the 2-year Treasury was little changed at 4.827%.

One basis point is equal to 0.01%, and yields and prices move in opposite directions.

Investors have grappled with a bond market selloff over the past few weeks, while a lackluster monthly jobs report on Friday helped to bring yields down and alleviated concerns about another rate hike.

Traders are now pricing in a nearly 82% chance of the Fed keeping rates unchanged at its next meeting, according to the CME Group's FedWatch Tool.

On the economic data front, the Institute for Supply Management's services activity report is due Monday, while investors will be looking ahead to the minutes from the central bank's September meeting on Wednesday.

"The highly unsettled bond market makes the incoming US data and Fed communication particularly relevant," Deutsche Bank analysts said in a note. "So the minutes will be worth watching for how the broader Committee is framing the current tightening cycle and for its discussion of the neutral rate, where estimates shifted higher in the September SEP."