Treasuries -US yields extend gains as investors weigh Iran conflict

Lou Brien, market strategist at DRW Trading, said markets were becoming inured to the protracted instability from the U.S.-Iran conflict and the countries' mutual threats.

"I think we're getting to the point where we're a little bit dulled by the overly expressive headlines," said Brien.

Wednesday's release of the minutes from the most recent meeting of the policy-setting Federal Open Market Committee should hold some interest, given the bond market's unsettled reaction to Fed Chairman Kevin Warsh's first news conference last month, according to Brien.

"Warsh has not completely rid the market of the idea that he's a Trump guy at the Fed rather than his own guy at the Fed," said Brien.

Fed futures markets on Monday afternoon put the chances of an interest rate hike next month at 32.6%.

The yield on the benchmark U.S. 10-year Treasury note US10YT=RR was last up 3.2 basis points to 4.728%. The yield on the 30-year bond US30YT=RR rose 4.8 basis points to 5.314%, its highest level in nearly 20 years.