Treasuries Come Under Pressure Ahead Of Fed Meeting

(RTTNews) - After initially showing a lack of direction, treasuries came under pressure over the course of the trading session on Monday.

Bond prices moved to the downside in morning trading and remained stuck in the red as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.3 basis points to 2.325 percent.

The drop by treasuries came as traders looked ahead to the Federal Reserve's monetary policy announcement on Wednesday.

While the Fed is likely to leave interest rates unchanged, traders will examine the accompanying statement for clues about future rate hikes.

The Labor Department is also due to release its closely watched monthly jobs report on Friday, with the report expected to show an increase of about 180,000 jobs.

On the U.S. economic front, a report released by the Institute for Supply Management showed that growth in manufacturing activity slowed more than expected in the month of April.

The ISM said its purchasing managers index dropped to 54.8 in April from 57.2 in March, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to dip to 56.5.

The Commerce Department also released a report showing that personal income rose slightly less than expected in the month of March.

The report said personal income rose by 0.2 percent in March after climbing by a downwardly revised 0.3 percent in February.

Economists had expected income to climb by 0.3 percent compared to the 0.4 percent increase originally reported for the previous month.

Meanwhile, the Commerce Department said personal spending was unchanged for the second consecutive month. Spending had been expected to rise by 0.2 percent.

A separate report from the Commerce Department showed that construction spending unexpectedly dipped by 0.2 percent in March.

Trading activity on Tuesday may remain somewhat subdued as the Fed begins its two-day monetary policy meeting amid a light day on the economic front.