Treasuries Close Roughly Flat After Early Move To The Upside

(RTTNews) - After moving to the upside early in the session, treasuries gave back ground over the course of the trading day on Monday.

Bond prices pulled back well off their early highs before ending the day roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 4.306 percent after hitting a low of 4.258 percent.

Treasuries initially benefitted from their appeal as a safe haven following the release of a Commerce Department report showing retail stocks increased by much less than expected in the month of February.

The Commerce Department said retail sales rose by 0.2 percent in February after tumbling by a revised 1.2 percent in January.

Economists had expected retail sales to climb by 0.7 percent compared to the 0.9 percent slump originally reported for the previous month.

Excluding a drop in sales by motor vehicle and parts dealers, retail sales increased by 0.3 percent in February after falling by 0.6 percent in January. Ex-auto sales were expected to rise by 0.5 percent.

Buying interest in the bond market weighed over the course of the session, however, as stocks on Wall Street rallied amid relief that the data wasn't even worse.

Traders may also have been reluctant to make significant moves ahead of the Federal Reserve's monetary policy announcement on Wednesday.

While the Fed is almost universally expected to leave interest rates unchanged, traders will look to the accompanying statement as well as officials' latest projections for clues about the outlook for rates.

Reports on industrial production, housing starts and import and export prices may attract attention on Tuesday, although activity is likely to be somewhat subdued ahead of the Fed announcement on Wednesday.