Treasuries Give Back Ground Amid Rally On Wall Street

(RTTNews) - After trending higher over the past few weeks, treasuries showed a notable move back to the downside during trading on Monday.

Bond prices came under pressure in morning trading and remained firmly negative throughout the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.8 basis points to 1.753 percent.

With the increase on the day, the ten-year yield rebounded after ending last Friday's trading at its lowest closing level in over a month.

The pullback by treasuries came amid a rally on Wall Street, with energy stocks helping to lead the way higher amid a sharp increase by the price of crude oil.

After advancing $1.55 or 3.5 percent to $46.21 a barrel in the previous week, crude oil for June delivery jumped $1.51 to $47.72 a barrel.

The price of crude oil reached its highest closing level in over six months, as supply disruptions in Nigeria led Goldman Sachs to raise its price forecast.

On the U.S. economic front, the New York Fed released a report this morning showing an unexpected decline in regional manufacturing activity in the month of May.

The New York Fed said its general business conditions index slid to a negative 9.0 in May from a positive 9.6 in April. A negative reading indicates a contraction in regional manufacturing activity.

Economists had expected the index to show a much more modest decrease, with the consensus estimate calling for a positive reading of 7.0.

A separate report from the National Association of Home Builders said homebuilder confidence held steady in May.

The report said the NAHB/Wells Fargo Housing Market Index came in at 58 in May, unchanged from the three previous months. Economists had expected the index to inch up to 59.

Traders were also digesting some disappointing Chinese economic data, which raised concerns about the global economy but also generated optimism about the possibility of further stimulus.

Reports from the Chinese National Bureau of Statistics showed weaker than expected growth in industrial production, retail sales, and fixed asset investment.

While the price of crude oil is likely to remain in focus on Tuesday, reports on consumer prices, housing starts, and industrial production will also attract attention.