Treasuries showed a notable move to the downside over the course of the trading day on Monday amid lingering concerns about the outlook for the Federal Reserve's stimulus program.
Bond prices moved lower in early trading and saw further downside going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.5 basis points to 2.171 percent.
The early weakness among treasuries was partly due to the release of some upbeat economic data, including a report from the National Association of Home Builders showing that its reading on homebuilder confidence jumped to a seven-year high in June.
The report said the NAHB/Wells Fargo Housing Market Index soared to 52 in June from 44 in May. Economists had been expecting the index to show a much more modest increase to a reading of 45.
With the much bigger than expected increase, the index climbed above 50 for the first time since April of 2006 and reached its highest level since hitting 54 in March of 2006. A reading above 50 indicates that more builders view sales conditions as good than poor.
A separate report from the New York Federal Reserve showed that its reading on regional manufacturing rose by much more than expected in June.
The New York Fed said its general business conditions index rose to a positive 7.8 in June from a negative 1.4 in May, with a positive reading indicating an increase in regional manufacturing activity. Economists had expected the index to climb to a positive 0.5.
Further selling pressure was generated late in the trading day by a report from the Financial Times predicting that the Fed will signal plans to taper its asset purchase program following the conclusion of its monetary policy meeting on Wednesday.
"Ben Bernanke is likely to signal that the U.S. Federal Reserve is close to tapering down its $85bn-a-month in asset purchases when he holds a press conference on Wednesday, but balance that by saying subsequent moves depend on what happens to the economy," the Financial Times said.
Reports on consumer prices and housing starts may attract some attention on Tuesday, although traders may be reluctant to make any significant moves as the Fed begins its two-day meeting.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.