Treasuries Climb Well Off Worst Levels But Remain Negative
Treasuries moved to the downside during trading on Monday but ended the session well off their worst levels of the day.
Bond prices regained ground after coming under pressure in morning trading but remained in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3 basis points to 2.960 percent after reaching a high of 3.019 percent.
The early weakness among treasuries came as stocks on Wall Street extended last Friday’s rebound following upbeat earnings news from financial giant Goldman Sachs (GS).
Traders continued to pick up stocks at relatively reduced levels after the rally in the previous session halted a recent downward trend.
Buying interest waned over the course of the session, however, as traders continued to worry about the economic outlook ahead of next week’s Federal Reserve meeting.
The subsequent pullback by stocks contributed to the recovery attempt by treasuries, as some traders looked for safer havens like bonds.
In U.S. economic news, the National Association of Home Builders released a report showing a substantial deterioration in U.S homebuilder confidence in the month of July.
The report showed the NAHB/Wells Fargo Housing Market Index plunged to 55 in July from 67 in June. Economists had expected the index to edge down to 66.
The HMI showed its second biggest single-month drop after a 42-point nosedive in April 2020, tumbling to its lowest level since May 2020.
On Tuesday, the Commerce Department is scheduled to release a separate report on new residential construction in the month of June.
Housing starts are expected to tumble by 2.7 percent to an annual rate of 1.650 million, while building permits are expected to jump by 2.3 percent to an annual rate of 1.585 million.
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