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Treasuries gained Monday, outperforming a supply-driven selloff in European government bonds, as Federal Reserve officials highlighted offsetting risks facing the U.S. economy.

The 10-year yield was lower by 3 basis points at about 2.47 percent at 3:30 p.m. in New York, near its session low reached concurrently with the 10-year gilt yield. U.K. yields fell with sterling after the U.K. said it will trigger the process to leave the European Union on March 29. Belgium led euro-zone yields higher after an auction of 10-year debt.

Treasuries extended last week's rally, which gathered pace after the Fed hiked while maintaining its rate forecasts. On CNBC Monday, Minneapolis Fed President Neel Kashkari, the lone dissenter on the increase, said growth was still too slow, while Chicago Fed President Charles Evans on Fox Business said inflation is his main concern.

• Flows included liquidation of bearish positions in eurodollar puts and short covering; IG credit issuance got off to a slow start for the week, totaling $4.6b from four issuers

• At a speech in New York on Monday, Fed's Evans backed two or three rate hikes in 2017 and said markets can cope with Fed balance-sheet normalization; at least eight other Fed officials, including Yellen, Dudley and Kashkari, have speeches scheduled later this week

• UST yields have scope to rise further based on adjustments to terminal rates and term premium, changes to Fed balance-sheet policy and prospect of ultra-long issuance, strategists said in weekly research, while gains could be driven by domestic or foreign political developments

• CFTC positioning data released Friday showed that speculators reduced net short position in 10Y futures ahead of March 15 FOMC decision while adding to record net short in eurodollar futures

• Bearishness on USTs has been tempered by oil remaining under $50 and lack of progress by federal government on tax cuts and other stimulus measures.