Treasuries Move Notably Lower, Extending Last Friday's Pullback

(RTTNews) - Following the moderate pullback seen during last Friday's session, treasuries showed a more notable move to the downside during trading on Monday.

Bond prices came under pressure in morning trading and remained firmly negative throughout the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 7.9 basis points to 4.096 percent.

The slump by treasuries came as traders continued to cash in on recent strength in the bond markets, which led the ten-year yield to close below 4 percent for the first time since late October last Thursday.

Treasuries have recently benefitted from renewed optimism about the outlook for interest rates following dovish comments from leading Federal Reserve officials.

Traders elected to take some profits from the recent strength even though CME Group's FedWatch Tool still indicates an 85.4 percent chance the Fed will lower rates by another quarter point at its monetary policy meeting next week.

The extended pullback by treasuries came even though the Institute for Supply Management released a report this morning unexpectedly showing a modest decrease by its reading on U.S. manufacturing activity in the month of November.

The ISM said its manufacturing PMI slipped to 48.2 in November from 48.7 in October, with a reading below 50 indicating contraction. Economists had expected the index to inch up to 49.0.