Treasuries Climb Off Worst Levels But Still Close Lower

(RTTNews) - Following the upward move seen last Friday, treasuries moved back to the downside during the trading session on Monday.

Bond prices climbed off their worst levels after seeing initial weakness but remained in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.1 basis points to 1.895 percent.

The pullback by treasuries came after MNI Indicators released a report showing Chicago-area business activity continued to contract in the month of December, although the pace of contraction slowed from the previous month.

MNI Indicators said its Chicago business barometer climbed to 48.9 in December from 46.3, but a reading below 50 still indicates a contraction in regional business activity. Economists had expected the barometer to rise to 48.0.

A separate report released by the National Association of Realtors showed pending home sales in the U.S. rebounded in the month of November.

NAR said its pending home sales index jumped 1.2 percent to 108.5 in November after falling by a revised 1.3 percent in October. Economists had expected pending home sales to surge up by 1.1 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Trading on Tuesday may be impacted by reaction to reports on consumer confidence and home prices, although trading activity may be subdued ahead of the New Year's day holiday on Wednesday.