Treasuries Close Moderately Lower After Seeing Early Strength

(RTTNews) - After moving modestly higher in early trading on Monday, treasuries turned lower over the course of the trading day.

Bond prices pulled back well off their early highs, ending the day moderately lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.5 basis points to 2.605 percent after hitting a low of 2.552 percent.

The downturn by treasuries reflected lingering concerns about the outlook for the Federal Reserve's stimulus program ahead of the release of some key economic data in the coming days.

Traders are likely to keep a close eye on reports on retail sales, industrial production, housing starts, and producer and consumer prices.

Reaction to the reports is likely to be shaded by how the data will impact the outlook for the Fed's asset purchase program.

Recent comments from Fed officials have suggested that the central bank could begin scaling back its asset purchases as early as its September meeting.

Trading on Tuesday is likely to driven by reaction to the Commerce Department's monthly retail sales report. Economists expect sales to rise by 0.3 percent in July following a 0.4 percent increase in June.

Reports on import and exports price and business inventories may also attract some attention, although they are likely to be overshadowed by the retail sales data.

Meanwhile, traders are also likely to keep a close eye on comments by Atlanta Fed President Dennis Lockhart, who is due to deliver remarks to the Kiwanis Club of Atlanta.