Treasuries Give Back Ground Amid Rally By Stocks

(RTTNews) - After trending higher over the past few sessions, treasuries gave back some ground over the course of the trading day on Monday.

Bond prices moved steadily lower in morning trading before moving roughly sideways in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.5 basis points to 1.895 percent.

With the increase on the day, the ten-year yield moved back to the upside after ending last Friday's trading at its lowest closing level in over two months.

The pullback by treasuries was partly due to a rally by stocks, which rebounded following the sell-off seen in the previous session.

Stocks benefited from news of additional Chinese stimulus, leading some traders to move out of the safe haven of bonds.

On Sunday, the People's Bank of China lowered the reserve requirement ratio for banks by 100 basis points to 18.5 percent.

The reduction marked the second cut this year and came after the Chinese economy logged its weakest growth in six years.

Lou Brien, an economic strategist at DRW Trading, said, "The cut in the RRR was larger than many were expecting and it was the biggest since 2008. It is estimated that it will free up the equivalent of $212 billion to be loaned out."

Tuesday represents another quiet day on the U.S. economic front, potentially leading to choppy trading in the bond market.