Treasuries fell on Monday after a better than expected report about existing home sales lowered concerns about the housing sector.
Existing home sales fell 0.4 percent to 4.89 million in January, less than forecasts, according to the National Association of Realtors.
Investors sold off bonds on the news, sending yields higher.
The ten year Treasury note fell 18/32 to yield 3.877 in early afternoon trading in New York, up from 3.80 late Friday. The two year note fell 3/32 to yield 2.079 from 2.05.
Meanwhile, financial markets could see a boost in stability if a bailout of bond insurer Ambac goes through. The company's shares were up on Monday on expectations that it could avoid a possible credit downgrade by receiving $3 billion in additional capital.