Treasuries Close Moderately Higher Amid Economic Worries

(RTTNews) - Treasuries moved moderately higher during trading on Tuesday, as traders looked for safe havens amid worries about the global economy.

Bond prices moved higher in early trading and remained positive throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.8 basis points to 2.172 percent.

The strength among treasuries reflected concerns about the global economy following the release of some disappointing Chinese economic data.

Revised estimates released by Markit showed that the Chinese manufacturing sector contracted by the most in six years in August.

A separate report also showed that the Chinese service sector expanded at the slowest pace in the current thirteen-month growth sequence.

The manufacturing index eased to 47.3 in August, down from 47.8 in July but up from the flash estimate of 47.1. The service sector index fell to 51.5 from 53.8 in July.

Adding to the worries, the Institute for Supply Management said its index of U.S. manufacturing activity fell to its lowest level in over two years in August.

The ISM said its purchasing managers index dropped to 51.1 in August from 52.7 in July, although a reading above 50 indicates continued growth in the manufacturing sector.

The decrease came as a surprise to economists, who had expected the manufacturing index to inch up to a reading of 52.8. With the unexpected decrease, the index fell to its lowest level since May of 2013.

Another batch of U.S. economic data could impact trading on Wednesday, with traders likely to keep an eye on reports on private sector employment, factory orders, and labor productivity.

The Federal Reserve's Beige Book is also likely to attract attention amid recent concerns about the outlook for interest rates.