Treasuries Give Back Ground Following Recent Strength

(RTTNews) - After trending higher over the past several sessions, treasuries moved back to the downside during trading on Monday.

Bond prices came under pressure early in the day and remained firmly negative throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 6.6 basis points to 4.279 percent.

The pullback by treasuries may have reflected profit taking following recent strength, which saw the ten-year yield close lower for fourth straight sessions and drop to its lowest closing level in well over two months.

Lingering uncertainty about the outlook for interest rates may also have weighed on treasuries after last week's inflation data largely came in tamer than expected but Federal Reserve officials forecast just one rate cut this year.

Meanwhile, traders were also looking ahead to the release of some key economic data this week, with reports on retail sales and industrial production are likely to be in the spotlight.

On the U.S. economic front, the Federal Reserve Bank of New York released a report this morning showing New York manufacturing activity contracted at a notably slower rate in the month of June.

The New York Fed said its general business conditions index climbed to a negative 6.0 in June from a negative 15.6 in May, although a negative reading still indicates contraction. Economists had expected the index to rise to a negative 9.0.

Despite the continued contraction in current activity, the New York Fed said optimism about the six-month outlook picked up to its highest level in more than two years.