Treasuries Close Slightly Lower But Well Off Worst Levels

(RTTNews) - After coming under pressure early in the session, treasuries regained ground over the course of the trading day on Monday.

Bond prices climbed well off their worst levels but still ended the day slightly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by nearly a basis point to 1.780 percent.

The ten-year yield pulled back after reaching a high of 1.808 percent but still ended the session at its highest closing level since January of 2020.

Concerns about the outlook for interest rates contributed to the continued weakness among treasuries, which extended the sharp drop seen in the first week of the New Year.

Treasuries have moved notably lower recently amid a more hawkish tone from the Federal REserve, as the minutes of the central bank's latest meeting indicated it plans to accelerate monetary policy normalization.

In U.S. economic news, the Commerce Department released a report showing wholesale inventories in the U.S. jumped by more than expected in the month of November.

The report said wholesale inventories surged up by 1.4 percent in November after spiking by 2.5 percent in October. Economists had expected inventories to increase by 1.2 percent.

Looking ahead, trading on Tuesday may be impacted by reaction to Federal Reserve Chair Jerome Powell's testimony at a Senate Banking Committee hearing on his renomination.

Bond traders are also likely to keep an eye on the results of the Treasury Department's auction of $52 billion worth of three-year notes.