Treasuries Show Notable Move Back To The Downside

(RTTNews) - Following the rebound seen during last Friday's session, treasuries showed a notable move back to the downside during trading on Monday.

Bond prices moved modestly lower in early trading and slid more firmly into negative territory as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 7.5 basis points to 4.599 percent.

The ten-year yield more than offset the 4.6 basis point decrease in the previous session, reaching its highest closing level in almost seven months.

The pullback by treasuries may have reflected lingering concerns about the outlook for interest rates after the Federal Reserve's forecast for fewer than previously estimated rate cuts next year.

Lawmakers' ability to reach a last-minute deal to avoid a government shutdown may also have reduced the safe-haven appeal of bonds.

Meanwhile, traders largely shrugged off a batch of weaker than expected U.S. economic data, including a Commerce Department report showing durable goods orders slumped by much more than expected in the month of November.

The report said durable goods orders tumbled by 1.1 percent in November after climbing by an upwardly revised 0.8 percent in October.

Economists had expected durable goods orders to fall by 0.4 percent compared to the 0.3 percent increase that had been reported for the previous month.

Excluding a steep drop by orders for transportation equipment, durable goods orders edged down by 0.1 percent in November after inching up by 0.2 percent in October. Ex-transportation orders were expected to rise by 0.3 percent.

Meanwhile, the report said orders for non-defense capital goods excluding aircraft, a key indicator of business spending, climbed by 0.7 percent in November after dipping by 0.1 percent in October.

A separate report released by the Conference Board showed an unexpected deterioration by consumer confidence in the month of December.

The Conference Board said its consumer confidence index tumbled to 104.7 in December from an upwardly revised 112.8 in November.

The pullback surprised economists, who had expected the consumer confidence index to rise to 113.0 from the 111.7 originally reported for the previous month.

A lack of major U.S. economic data may lead to a choppy trading session on Tuesday ahead of the Christmas Day holiday on Wednesday.