Treasuries Give Back Ground Following Recent Strength

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

Bond prices moved to the downside in early trading and remained stuck in the red throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.8 basis points to 1.496 percent.

The pullback by treasuries came as traders cashed in on some of the recent gains, although activity was somewhat subdued ahead of some key events later this week.

The Bank of England's monetary policy decision on Thursday is likely to be in focus along with the monthly U.S. jobs report due on Friday.

On the U.S. economic front, the Institute for Supply Management released a report this morning showing a modest slowdown in the pace of growth in the manufacturing sector in the month of July.

The ISM said its purchasing managers index dipped to 52.6 in July from 53.2 in June, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to come in unchanged.

The drop by the manufacturing index came after it hit its highest level since reaching 53.3 in February of 2015 in the previous month.

A separate report from the Commerce Department showed an unexpected decline in construction spending in the month of June.

The report said construction fell by 0.6 percent to an annual rate of $1.134 trillion in June. The decrease came as a surprise to economists, who had expected spending to climb by 0.6 percent.

Trading on Tuesday may be impacted by reaction to a report on personal income and spending in the month of June.