Treasuries Move Significantly Lower On Upbeat Manufacturing Data

(RTTNews) - Treasuries moved significantly lower during the trading day on Monday, extending the pullback seen over the two previous sessions.

Bond prices came under pressure early in the session and saw further downside as the day progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped by 8.3 basis points to 2.497 percent.

The initial weakness among treasuries came as continued optimism about U.S.-China trade talks as well as a upbeat Chinese manufacturing data reduced the appeal of safe haven assets such as bonds.

Official data showed Chinese manufacturing activity unexpectedly grew for the first time in fourth months in March.

A private survey also showed the manufacturing sector in the world's second biggest economy returning to growth.

Additionally, Beijing has announced that it will continue to suspend additional tariffs on U.S. vehicles and auto parts after April 1 as a gesture after Washington delayed tariff hikes on Chinese imports.

A delegation led by Chinese Vice Premier Liu He is headed to Washington later this week for another round of trade talks.

Treasuries saw further downside following the release of a report from the Institute for Supply Management unexpectedly showing a faster rate of growth in U.S. manufacturing activity in the month of March.

The ISM said its purchasing managers index rose to 55.3 in March after falling to 54.2 in February, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to come in unchanged.

"Comments from the panel reflect continued expanding business strength, supported by gains in new orders and employment," said Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee. Meanwhile, traders largely shrugged off a separate report from the Commerce Department showing an unexpected decrease in U.S. retail sales in February.

The report said retail sales dipped by 0.2 percent in February after climbing by an upwardly revised 0.7 percent in January.

Economists had expected sales to rise by 0.3 percent compared to the 0.2 percent uptick originally reported for the previous month.

Excluding a rebound in sales by motor vehicle and parts dealers, retail sales fell by 0.4 percent in February after jumping by a revised 1.4 percent in January.

Ex-auto sales had been expected to climb by 0.4 percent compared to the 0.9 percent increase originally reported for the previous month.

Following the slew of U.S. economic data released today, trading on Tuesday may be impacted by reaction to a report on durable goods orders in February.