U.S. Treasuries faced selling pressure during the American trading session, after the five-year note auction's awarded yield came in 0.5 basis points above its pre-issuance trading level. Concurrently, renewed obstacles in efforts to resume Iran war negotiations pushed oil prices higher. This week's Treasury auctions will conclude on Tuesday with the sale of $44 billion in seven-year notes.

Shortly after 3 p.m. New York time, Treasury yields retreated from their daily peaks but remained up by 2 to 3 basis points overall. The yield curve steepened slightly, with the 2s5s and 2s10s spreads each widening by approximately 1 basis point. The yield on the 10-year U.S. Treasury note settled near 4.33%, after approaching 4.35% following the five-year auction.

The five-year Treasury auction's high yield was 0.5 basis points above the prevailing yield at the time of the auction. Primary dealers were allotted 12.7%, a lower share than recent auctions. Indirect bidders received 72.3%, an increased portion, while direct bidders took 15%, a decreased share. This auction followed a solid two-year note sale, which stopped just 0.1 basis points above its pre-auction level, with strong bidding metrics.

The session's peak yields occurred after the weak five-year auction. Meanwhile, oil prices held near their highs, with the June WTI crude futures contract up approximately 2.2% late in the U.S. session, though off its intraday peak.

In the U.S. Treasury options market, notable trades included a large block of long-dated put options targeting a 20-year yield near 5.15%, and a 10-year put option expiring Thursday, covering event risk from Wednesday's Federal Open Market Committee (FOMC) meeting.

As of 3:35 p.m. ET, the two-year Treasury yield was up 2.1 basis points at 3.7993%. The five-year Treasury yield was up 3.2 basis points at 3.9467%. The ten-year Treasury yield was up 3.6 basis points at 4.3365%. The thirty-year Treasury yield was up 3.7 basis points at 4.944%. The yield spread between five-year and thirty-year notes widened by about 0.7 basis points to 99.56 basis points. The yield spread between two-year and ten-year notes widened by about 1.6 basis points to 53.51 basis points.