Treasuries Move Notably Higher Following Disappointing Manufacturing Data

(RTTNews) - Treasuries moved notably higher during trading on Monday following the release of some disappointing regional manufacturing data.

Bond priced jumped in early trading and remained firmly positive throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.6 basis points to 2.15 percent.

The strength among treasuries came following the release of a report from the New York Federal Reserve showing that regional manufacturing activity unexpectedly contracted in August.

The New York Fed said its general business conditions index tumbled to a negative 14.9 in August from a positive 3.9 in July, with a negative reading indicating a contraction in manufacturing activity.

The sharp drop came as a surprise to economists, who had expected the index to climb to a positive reading of 4.8.

With the unexpected decrease, the general business conditions index fell to its lowest level since hitting a negative 19.4 in April of 2009.

Meanwhile, traders seemed to shrug off a separate report from the National Association of Home Builders showing a modest uptick in homebuilder confidence.

The report said the NAHB/Wells Fargo Housing Market Index inched up to 61 in August from 60 in July, in line with economist estimates.

With the modest uptick, the housing market index reached its highest level since hitting a matching reading in November of 2005.

The Commerce Department is scheduled to release a separate report on new residential construction in the month of July on Tuesday.

Economists expect housing starts to rise to an annual rate of 1.180 million in July after jumping to a rate of 1.174 million in June.