By Min Zeng 
 

U.S. Treasury bonds pulled back on Monday as broad price gains in global stocks sapped demand for haven assets.

Investors piled into equity markets as comments from China's central bank chief fueled speculation that policy makers in the world's second largest economy may implement fresh monetary stimulus.

In recent trading, the yield on the benchmark 10-year Treasury note was 1.968%, compared with 1.946% on Friday, according to Tradeweb.

When bond prices fall, their yields rise. The yield has fallen from 2.173% at the end of 2014, set for a price gain this quarter ending Tuesday.

The Shanghai Composite posted its biggest gains in more than two months after People's Bank of China Governor Zhou Xiaochuan over the weekend indicated that China can ease policy further if inflation continues to slip.

"The risk on trade is weighing on the bond market," said Larry Milstein, head of government and agency trading at R.W. Pressprich & Co. in New York.

Treasury bond prices rallied Friday after a report showed the U.S. economy grew at a slower pace than economists forecast in the final quarter of 2014, which bolstered expectations that the Fed would take its time in raising short-term interest rates this year.

The nonfarm payrolls report for March is due Friday, the key datapoint to shape up investors' expectations on the timing of the first interest-rate increase by the Fed in nearly a decade. The Fed's next policy meeting is set for April 28-29.

Anxiety has risen over the past two months on whether the Fed is going to raise rates in June or later this year, which has generated swings in the bond market. An uncertain growth outlook overseas, still-subdued inflation and mixed U.S. economic releases over the past few weeks have complicated the Fed's policy adjustments.

Higher short-term interest rates could dent the value of outstanding bonds, as buyers are likely to flock to new bonds issued at higher yields.

The 10-year yield tumbled to 1.669% on Feb. 2, the lowest closing level since May 2013 amid worries over the global growth outlook. It surged to this year's peak of 2.24% on March 6, the highest level since December, after the nonfarm payrolls report for February showed strong jobs growth.

Fed Chairwoman Janet Yellen said Friday the timing hinges on how the economy performs in the months ahead. She said the tightening cycle this time would be gradual. The Fed last raised interest rates in 2006. It has kept the fed-funds target rate near zero since December 2008.

Many investors still see a very low probability for the Fed to raise rates this summer. The federal-funds futures, used by investors and traders to place bets on central-bank policy, showed Monday that the market sees a 6% likelihood of a rate increase in June, compared with 9% Friday, according to data from CME Group.

Write to Min Zeng at min.zeng@wsj.com