Treasuries Close Roughly Flat After Seeing Early Strength

(RTTNews) - After failing to sustain an early upward move, treasuries gave back ground over the course of the session on Monday before closing roughly flat.

Bond prices pulled back off their highs in afternoon trading and ended the day near the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, closed unchanged at 2.721 percent after hitting a low of 2.688 percent.

The early strength among treasuries was partly in reaction to the significant weakness seen last Thursday, which reflected upbeat economic data as well as news of an agreement to address the crisis in Ukraine.

Ongoing tensions in Ukraine despite last week's agreement in Geneva also contributed to the early rebound by treasuries.

A shootout at a checkpoint run by pro-Russian militants near the eastern Ukrainian city of Slovyansk left at least three dead on Sunday.

Ukrainian and Russian officials have traded accusations of blame for the incident, which offset optimism about an easing of tensions.

Treasuries did not see much follow-through on the early upward move, however, with a report from the Conference Board report showing a bigger than expected increase by its leading economic indicators index helping to limit the upside.

The Conference Board said its leading economic index rose by 0.8 percent in March after climbing by 0.5 percent in February. The advance exceeded economist estimates for a 0.7 percent increase.

"The LEI rose sharply again, the third consecutive monthly increase," said Ataman Ozyildirim, an economist at the Conference Board. "After a winter pause, the leading indicators are gaining momentum and economic growth is gaining traction."

The subsequent pullback by treasuries partly reflected strength that emerged on Wall Street, with stocks extending the upward move that was seen last week.

Trading on Tuesday may be impacted by a report on existing home sales as well as the results of the Treasury Department's auction of $32 billion worth of two-year notes.