logo
Plus   Neg
Share
Email

Treasuries Move Modestly Lower Amid Rebound On Wall Street

Treasuries saw modest weakness during trading on Monday, giving back ground after trending higher in recent sessions.

Bond prices moved to the downside early in the session and remained stuck in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 1.8 basis points to 3.072 percent.

The modest pullback by treasuries came amid a rally on Wall Street, with traders picking up stocks at reduced levels following the sell-off seen last week.

The drop seen during last Friday's holiday-shortened session dragged the Dow and the S&P 500 to their lowest closing levels in four and six months, respectively.

Trading activity was somewhat subdued, however, with traders looking ahead to a meeting between President Donald Trump and Chinese President Xi Jinping later this week.

Trump and Xi are due to meet at the G20 summit in Buenos Aires, Argentina, beginning on Friday, with traders likely to keep a close on eye out for signs of progress on a potential trade deal.

A lack of economic data also kept some traders on the sidelines, although reports on consumer confidence, new home sales, and personal income and spending are likely to attract attention in the coming days.

Traders are also likely to keep an eye on remarks by Federal Reserve Chairman Jerome Powell as well as the minutes of the Fed's latest monetary policy meeting.

Treasuries remained in negative territory following the release of the results of the Treasury Department's auction of $39 billion worth of two-year notes, which attracted below average demand.

The two-year note auction drew a high yield of 2.836 percent and a bid-to-cover ratio of 2.65, while the ten previous two-year note auctions had an average bid-to-cover ratio of 2.77.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

Looking ahead, the Treasury is due to sell $40 billion worth of five-year notes on Tuesday and $32 billion worth of seven-year notes on Wednesday.

Economic data may also attract attention on Tuesday, with traders likely to keep an eye on reports on home prices and consumer confidence.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Follow RTT