Treasuries Regain Ground Following Recent Downward Trend

(RTTNews) - After showing a notable move to the downside over the past few sessions, treasuries regained some during trading on Monday.

Bond prices showed a strong upward move in early trading but pulled back off their best levels going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.6 basis points to 2.857 percent.

With the modest decrease on the day, the ten-year yield pulled back off the nearly three-month closing high that it set last Friday.

Bargain hunting contributed to the modest strength among treasuries, with the recent jump in yields increasing the appeal of bonds.

However, traders seemed somewhat reluctant to make any significant moves amid a lack of major U.S. economic data.

Following the slew of key economic data released last week, the economic calendar is relatively light throughout this week.

While reports on retail sales, jobless claims, and producer prices are likely to attract some attention, the data is not expected to shed much light on the outlook for the Federal Reserve's stimulus program.

The late-day pullback by treasuries may have reflected comments from the St. Louis Fed President James Bullard, who said the central bank may begin tapering its asset purchase plan next week in response to better-than-expected jobs data.

"Based on labor market data alone, the probability of a reduction in the pace of asset purchases has increased," Bullard told the CFA Society of St. Louis on Monday.

Trading activity on Tuesday is likely to remain relatively subdued amid another quiet day on the U.S. economic front.

Nonetheless, bond trading could be impacted by reaction to the results of the Treasury Department's auction of $30 billion worth of three-year notes.