* Treasury sells $20 billion 10-year notes to disappointing demand
* Rising oil prices drive stocks, weaken safe-haven demand
* Traders cautious of major moves ahead of ECB meeting (New throughout, updates prices, adds quotes)
By Tariro Mzezewa
NEW YORK, March 9 (Reuters) - U.S. Treasury yields rose on Wednesday as some investors bet the recent decline in yields due to global growth concerns was overdone and after a disappointing debt auction by the Treasury Department.
Yields extended their climb with benchmark yields testing session highs as weak demand for $20 billion worth of 10-year government debt stoked a wave of selling.
“Treasuries were trading weaker ahead of the auction, building in a meaningful pre-auction concession,” said Ian Lyngen, senior government bond strategist at CRT Capital in Stamford, Connecticut.
Treasury yields fell to one-week lows on Tuesday after data showed China’s February trade performance was worse than expected, with exports falling 25.4 percent, the most in over six years and twice as much as markets had feared. The data rekindled fears of a global slowdown and sent investors rushing for safer assets.
“Yesterday we saw a rally in Treasuries mostly driven by oil prices and growth worries, so there’s going to be this correction,” said Bruno Braizinha, interest rates strategist at SG Corporate & Investment Banking in New York.
Adding to low demand for Treasuries on Wednesday was caution ahead of a key ECB policy meeting on Thursday. The central bank is expected to cut the deposit rate by 10 basis points, announce more asset purchases and possibly introduce tiered interest rates to boost inflation.
But after the ECB disappointed many in December, traders are wary of making major bets prior to the meeting.
“There is a risk the ECB will disappoint again tomorrow and that will follow through in markets,” said Tom Simons, money market strategist at Jefferies & Co in New York.
On Wall Street, a strong recovery in oil prices pushed energy shares higher, further reducing investor demand for safe-haven debt.
The benchmark 10-year note was last down 17/32 in price to yield 1.891 percent, up from 1.834 percent late on Tuesday.
The 30-year bond was last down 29/32 in price to yield 2.682 percent, up from 2.639 percent late on Tuesday.
The Treasury will sell $12 billion of 30-year bonds on Thursday. (Reporting by Tariro Mzezewa Editing by W Simon and Chizu Nomiyama)