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Treasuries Give Back Ground Ahead Of U.S.-China Trade Deal Signing

Treasuries moved to the downside during trading on Monday, giving back ground after moving higher over the two previous sessions.

Bond prices came under pressure early in the session and remained stuck in the red throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.3 basis points to 1.848 percent.

The pullback by treasuries came as traders seem optimistic about the impact of the phase one U.S.-China trade deal due to be signed later this week, reducing the appeal of safe havens like bonds.

Chinese Vice Premier Liu He is scheduled to visit Washington to sign the deal, which is said to include reduced tariffs on Chinese goods in exchange for increased Chinese purchases of U.S. agricultural products.

In an interview with Fox News on Sunday, Treasury Secretary Steven Mnuchin said the agreement calls for China to purchase $40 to $50 billion worth of U.S. agricultural products annually.

Mnuchin described the agreement as "very, very extensive," although the deal will not completely resolve the trade dispute between the U.S. and China.

Trading activity was somewhat subdued, however, as traders looked ahead to the release of reports on consumer and producer price inflation, retail sales, homebuilder confidence, and industrial production later this week.

The Labor Department's report on consumer price inflation is due to be released on Tuesday, with consumer prices expected to rise by 0.3 percent in the month of December.

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