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Treasuries Move Lower Ahead Of Trump-Kim Summit

After ending last Friday's trading roughly flat, treasuries showed a moderate move to the downside during trading on Monday.

Bond prices moved lower early in the session and remained stuck in negative territory throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2 basis points to 2.957 percent.

The lower close by treasuries came as traders looked ahead to the historic summit between President Donald Trump and North Korean leader Kim Jong Un on Tuesday.

Ahead of the meeting, Secretary of State Mike Pompeo indicated the U.S. is prepared to offer North Korea "unique" security assurances in exchange for the complete, verifiable and irreversible denuclearization of the Korean peninsula.

In remarks last Thursday, Trump expressed some optimism about his meeting with Kim but stressed that he is willing to walk away from negotiations.

Trump said his administration has stopped using the term "maximum pressure" with regard to North Korea and suggested the success of the negotiations could be determined by whether he uses the words after the meeting.

In addition to the highly anticipated Trump-Kim meeting, traders are also looking ahead to monetary policy announcements by the Federal Reserve and the European Central Bank.

The Fed is widely expected to raise interest rates by 25 basis points, while the ECB has indicated its meeting will be used to discuss ending its bond purchasing program.

Meanwhile, traders largely shrugged off the results of the Treasury Department's auctions of $32 billion worth of three-year notes and $22 billion worth of ten-year notes.

The three-year note auction drew modestly below average demand, while the ten-year note auction attracted above average demand.

The Treasury is due to finish off this week's series of long-term securities auctions with the sale of $14 billion worth of thirty-year bonds on Tuesday.

Trading on Tuesday may be impacted by reaction to news regarding to the meeting between Trump and Kim, with the president due to speak to the media before departing Singapore at about 8 am ET.

Trump's comments about the summit are likely to overshadow the Labor Department's report on consumer price inflation in the month of May.

by RTTNews Staff Writer

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