Treasuries Move Moderately Higher Amid Ongoing Worries About Greece

(RTTNews) - Treasuries moved moderately higher over the course of the trading day on Monday, climbing further off their recent lows.

After seeing initial strength, bond prices gave back some ground but remained in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.7 basis points to 2.358 percent.

With the decrease on the day, the ten-year yield pulled back further off the eight-month closing high set last Wednesday.

The strength among treasuries came as talks between Greece and its international creditors once again broke down over the weekend.

The inability of the two sides to reach a compromise has led to worries about a potential Greek default at the end of the month.

A meeting of the European finance ministers scheduled for Luxembourg on Thursday could be a make-or-break session for Greece.

Treasuries also benefited from the release of some disappointing U.S. economic data, including a report from the Federal Reserve showing an unexpected drop in industrial production in May.

The Fed said industrial production fell by 0.2 percent in May following a downwardly revised 0.5 percent decrease in April.

Economists had been expecting production to increase by 0.2 percent compared to the 0.3 percent drop originally reported for the previous month.

Separately, the New York Fed said its general business conditions index fell to a negative 2.0 in June from a positive 3.1 in May, with a negative reading indicating a contraction in regional manufacturing activity.

The decrease came as a surprise to economists, who had expected the general business conditions index to climb to a positive 5.9.

Meanwhile, the National Association of Home Builders released a report showing a substantial improvement in homebuilder confidence in the month of June.

The report said the NAHB/Wells Fargo Housing Market Index jumped to 59 in June from 54 in May. The index has been expected to show a more modest increase to a reading of 56.

With the bigger than expected increase, the housing market index reached its highest level since a matching reading in September of 2014.

A report on housing starts may attract some attention on Tuesday, although traders may be reluctant to make any significant moves ahead of the Fed's monetary policy announcement on Wednesday.