Treasuries Climb Further Off Last Week's Lows

(RTTNews) - Treasuries moved modestly higher over the course of the trading day on Monday, climbing further off their recent lows.

Bond prices moved to the upside in morning trading and managed to remain positive throughout the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2.1 basis points to 2.566 percent.

With the drop on the day, the ten-year yield pulled back further off the two-month closing high that it set last Thursday.

The modest strength among treasuries was partly due to comments from Chinese Finance Minister Lou Jiwei indicating that China won't dramatically alter its economic policy despite signs of downward pressure on growth.

Peter Boockvar, managing director at the Lindsey Group, said, "With the current slowdown in economic activity in China mostly due to the air coming out of the property market bubble, many assume Chinese officials will just provide another round of massive stimulus."

"Instead, however, we've gotten only small doses and it looks like that will be the most we'll see as China realizes that it must wean itself off the vicious cycle of stimulus, slowdown, stimulus, slowdown, etc.," he added.

Additionally, the National Association of Realtors released a report showing an unexpected drop in U.S. existing home sales in the month of August.

NAR said existing home sales fell 1.8 percent to a seasonally adjusted annual rate of 5.05 million in August from a downwardly revised 5.14 million in July.

The drop came as a surprise to economists, who had expected existing home sales to climb to an annual rate of 5.18 million.

Amid a quiet day on the U.S. economic front, trading on Tuesday could be impacted by the results of the Treasury Department's auction of $29 billion worth of two-year notes.