Demand for U.S. government debt faltered at the start of a heavy issuance week, with the Treasury’s $58 billion sale of three-year notes producing a high yield of 3.669%, about 0.7 basis point above pre-auction levels. Indirect bidders—often a proxy for foreign buyers—took 54%, the smallest share since December 2023, leaving primary dealers with their largest allocation in four months. Yields across the curve rose modestly after the auction, with the benchmark 10-year holding near 4.20% and the 30-year hovering just below 4.80%, as investors brace for $38 billion in 10-year notes on Wednesday and $24 billion in 30-year bonds the following day. Signs of softer appetite also surfaced in Europe. Spain’s Treasury raised €5.585 billion in six- and 12-month bills, yet the cover ratio on the one-year tranche slipped to 1.27, its lowest since April 2020, even as the marginal yield inched up to 1.958%. The finance ministry, which will pause its end-August bill sale, attributed part of the pullback to seasonal factors but acknowledged that returns below 2% are less compelling for investors after the European Central Bank’s rate cuts. The lacklustre auctions come five years after U.S. 10-year yields hit a record low of 0.51% at the height of the pandemic. With global benchmark rates now near 4%, traders are weighing whether additional supply and diverging central-bank paths will keep upward pressure on long-dated yields through the second half of the year.