Treasuries Pull Back Further Off Their Recent Highs

(RTTNews) - Treasuries showed a notable move to the downside during trading on Monday, extending the modest pullback seen in the previous session.

Bond prices came under pressure early in the session and remained firmly negative throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 5.9 basis points to 1.598 percent.

The ten-year yield added to the 1 basis point gain posted last Friday, climbing further off its lowest closing level in three years.

The weakness among treasuries came amid continued optimism about new global after the People's Bank of China said it would use market-based reform methods to help lower real lending rates and prop up a slowing economy.

News that President Donald Trump's administration is once again delaying restrictions on Chinese tech giant Huawei also reduced the appeal of safe haven assets like bonds.

Commerce Secretary Wilbur Ross revealed the news in an appearance on the Fox Business Network, announcing a "temporary general license" set to expire on Monday will be extended for another 90 days.

The move will allow Huawei to continue purchasing supplies from U.S. companies despite being placed on an economic blacklist back in May.

"There is another 90 days for the U.S. telecom companies, some of the rural companies are dependent on wild ways," Ross said. "So we're giving them a little more time to wean themselves off. But there are no specific licenses being granted for anything."

Additionally, Trump's economic advisers took to the Sunday talk shows to downplay concerns about a possible recession.

Trump himself told reporters that he does not foresee an economic downturn even after last week's yield curve inversion, which is widely seen as an early recession indicator.

"I don't think we're having a recession," Trump said. "We're doing tremendously well. Our consumers are rich. I gave a tremendous tax cut and they're loaded up with money."

Trading activity may be somewhat subdued on Tuesday, as another light day on the U.S. economic front may keep some traders on the sidelines.