FX.co ★ Treasuries Give Back Ground Following Recent Strength

In recent sessions, treasuries had been on an upward trend, but they reversed course during Monday's trading.

Bond prices faced pressure early on and remained significantly negative throughout the day. Consequently, the yield on the benchmark ten-year note, which inversely correlates with its price, rose by 6.6 basis points to 4.279 percent.

This pullback in treasuries may have resulted from profit-taking following their recent strength, which saw the ten-year yield drop for four consecutive sessions, reaching its lowest closing level in over two months.

Persistent uncertainty regarding the outlook for interest rates also likely impacted treasuries. Last week's inflation data was notably tamer than anticipated, yet Federal Reserve officials are forecasting just one rate cut this year.

Market participants are now looking ahead to key economic data releases this week, with particular attention to reports on retail sales and industrial production.

On the economic front, the Federal Reserve Bank of New York released a report indicating that New York manufacturing activity contracted at a significantly slower pace in June.

The New York Fed’s general business conditions index improved to a negative 6.0 in June, up from a negative 15.6 in May; however, a negative reading still signals contraction. Economists had predicted the index would rise to a negative 9.0.

Despite the continued contraction in current activity, the New York Fed noted that optimism about the six-month outlook reached its highest level in more than two years.