Treasury 10-year yields were within four basis points of the highest in nine months, as the U.S. prepared to sell $24 billion of the securities after demand fell at a sale of three-year notes yesterday. The yields earlier rose to the most since April after climbing 11 basis points yesterday, the biggest one-day advance in more than a month. U.S. debt maturing in a decade and longer handed investors a 2.3 percent loss in the past week, the biggest decline of 174 indexes of sovereign bonds around the world, according to data compiled by Bloomberg. The Treasury will auction $16 billion of 30-year bonds tomorrow. Federal Reserve Chairman Ben S. Bernanke is scheduled to speak today amid speculation the central bank will curb its bond purchases or opt not to extend them. “The three-year auction last night was an unmitigated disaster,” because of the structure of the bidding and the low foreign demand, said Marc Ostwald, a London-based strategist at Monument Securities Ltd. “This doesn’t mean that tomorrow’s 30- year will go badly but it does leave a lot of questions about the 10-year tonight.” The benchmark 10-year note yield was little changed at 3.74 percent as of 8:52 a.m. in London, according to BGCantor Market Data. The 2.625 percent security maturing in November 2020 traded at 90 31/32. The yield earlier rose to 3.77 percent, the highest since April 29. Debt Auctions The 10-year securities scheduled for sale today yielded 3.77 percent in pre-auction trading, compared with 3.388 percent at the previous sale of the debt on Jan. 12. Investors bid for 3.30 times the amount on offer last month, versus the average of 3.13 for the past 10 auctions. Indirect bidders, the group that includes foreign central banks, bought 53.6 percent, while the 10-sale average is 46.4 percent. Yesterday’s $32 billion three-year note auction drew a yield of 1.349 percent, compared with a forecast of 1.345 percent in a Bloomberg News survey of 8 of the Fed’s 20 primary dealers. The yield was the highest since the government sold $38 billion of the securities in May at 1.414 percent. Indirect bidders at the auction, a class of investors that includes foreign central banks, bought 27.6 percent of the notes, less than 39.4 percent in January. The government will conclude this week’s auctions with a $16 billion 30-year sale tomorrow. Fed Purchases The Fed is scheduled to buy $6 billion to $8 billion of securities due from February 2015 to July 2016 today, according to its website. Policy makers announced in November the bank would purchase $600 billion of Treasuries by the end of June to pump money into the economy. Fed Bank of Richmond President Jeffrey Lacker said yesterday the quickening U.S. recovery means policy makers need to adhere to their commitment to review the program. “The distinct improvement in the economic outlook since the program was initiated suggests taking that re-evaluation quite seriously,” Lacker said in a speech in Newark, Delaware. Fed Bank of Dallas President Richard Fisher said he’ll probably vote against any proposal to further expand the central bank’s balance sheet. “Barring some unexpected shock to the economy or financial system, I think we are pushing the envelope with the current round of Treasury purchases,” Fisher, who votes this year on the policy-setting Federal Open Market Committee, said in the text of remarks in Dallas yesterday. Bernanke Testifies Yields are rising most on notes, where the central bank is making the bulk of its purchases, reflecting concern those securities will suffer the steepest losses when the buying stops. The difference between the Fed’s target rate and five-year yields expanded to 2.15 percentage points yesterday, the widest since May, and was at 2.14 percentage points today. The spread between 10- and 30-year yields shrank to 1.02 percentage points today, the narrowest since July. The Fed plans to make 23 percent of its purchases in Treasuries due in 5 1/2 years to 7 years, versus 4 percent for those maturing in 17 years to 30 years, according to its website. Bernanke is scheduled to testify today before the House Budget Committee, as investors add to bets that quickening economic growth will lead to inflation. The unemployment rate declined to a 21-month low in January. Walt Disney Co., the world’s biggest theme-park company, reported yesterday first-quarter profit that beat analysts’ estimates after an increase in attendance at its resorts. The difference between yields on 10-year notes and Treasury Inflation Protected Securities, a gauge of expectations for consumer prices over the life of the debt, was little changed at 2.36 percentage points after rising to an eight-month high of 2.42 percentage points on Jan. 5. The so-called breakeven rate has risen from a 15-month low of 1.47 percentage points in August. The five-year average is 2.09 percentage points. To contact the reporters on this story: Emma Charlton in London at echarlton1@bloomberg.net; Wes Goodman in Singapore at wgoodman@bloomberg.net. To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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