Treasuries Close Modestly Higher Following Disappointing Data

(RTTNews) - After initially showing a lack of direction, treasuries moved modestly higher over the course of the trading session on Monday.

Bond prices moved to the upside going into the close after lingering near the unchanged for much of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.9 basis points to 1.819 percent.

With the modest decrease, the ten-year yield closed lower for the third straight day, pulling back further off Tuesday's one-month high.

The strength that emerged among treasuries came following the release of a batch of largely disappointing U.S. economic data.

Before the start of trading, the Commerce Department released a report showing a slightly smaller than expected increase in personal spending in March.

The Commerce Department said personal spending edged up by 0.1 percent in March after rising by an upwardly revised 0.2 percent in February. Spending had been expected to increase by 0.2 percent.

Meanwhile, the report also said personal income climbed by 0.4 percent in March after inching up by a downwardly revised 0.1 percent in February. Economists had been expecting income to rise by 0.3 percent.

With income rising faster than spending, the personal savings rate rose to 5.4 percent in March from 5.1 percent in February, reaching its highest level in thirteen months.

The University of Michigan also released a report showing that its consumer sentiment index for April was downwardly revised to 89.0 from the mid-month reading of 89.7.

The index subsequently came in well below the final March reading of 91.0 and is now at its lowest level since hitting 87.2 last September.

Additionally, MNI Indicators released a report showing that growth in Chicago-area business activity slowed by much more than expected in the month of April.

MNI Indicators said its Chicago business barometer slumped to 50.4 in April after surging up to 53.6 in March. While a reading above 50 indicates continued growth, the barometer had been expected to show a much more modest drop to 53.4.

Next week, the Labor Department's monthly employment report is likely to be in focus as traders attempt to gauge the strength of the economy.

Reports on manufacturing and service sector activity, international trade and labor productivity may attract some attention in the days leading up the jobs report next Friday.