Treasuries Move Notably Higher On Disappointing Economic Data

(RTTNews) - Extending the upward move seen over the two previous sessions, treasuries moved notably higher during trading on Monday.

Bond prices moved steadily higher over the course of morning trading before moving roughly sideways in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5.5 basis points to 2.15 percent.

With the continued decrease on the day, the ten-year yield ended the session at its lowest closing level in two months.

The strength among treasuries came following the release of some disappointing economic data, including a report from the Institute for Supply Management showing that activity in the manufacturing sector unexpectedly grew at a slower rate in July.

The ISM said its purchasing managers index dipped to 52.7 in July from 53.5 in June, although a reading above 50 indicates continued growth in the manufacturing sector.

The decrease came as a surprise to economist, who had expected the manufacturing index to inch up to a reading of 53.7.

Bradley J. Holcomb, chair of the ISM Manufacturing Business Survey Committee, said, "Comments from the panel reflect a combination of optimism mixed with uncertainties about international markets and the impacts of the continuing decline in oil prices."

The Commerce Department also released a separate report showing a much smaller than expected increase in construction spending in the month of June.

A report on factory orders may attract some attention on Tuesday, with economists expecting orders to jump by 1.7 percent in June after falling by 1.0 percent in May.