FX.co ★ Treasuries Recover From Early Weakness To Close Modestly Higher

During Monday's trading session, U.S. Treasury securities initially faced downward pressure but exhibited a rebound as the day progressed. Bond prices rose significantly from their early low points, ultimately closing with modest gains. Consequently, the benchmark ten-year note yield, which inversely correlates with bond prices, decreased by 1.4 basis points, settling at 4.414 percent after peaking at 4.491 percent.

This recovery in Treasury prices likely reflected their attraction as a safe haven amidst growing concerns over escalating tensions between Russia and Ukraine. President Volodymyr Zelensky of Ukraine reported a "massive" missile and drone attack by Russia targeting Ukraine's power infrastructure.

In the geopolitical arena, U.S. President Joe Biden has authorized Ukraine to conduct strikes deep within Russian territory using long-range missiles supplied by the United States, a move that has provoked a strong reaction from Russian officials. Russian Senator Vladimir Dzhabarov labeled the decision as "an unprecedented step towards World War Three."

This shift in U.S. policy comes in the wake of Russia's deployment of North Korean ground troops to bolster its military forces, a development that has raised concerns in Washington and Kyiv. The Russian President previously stated that any strikes on Russian soil using U.S.-manufactured weapons would be viewed as direct NATO involvement in the conflict.

In domestic economic developments, the National Association of Home Builders (NAHB) reported a significant improvement in homebuilder confidence for November, exceeding expectations. The NAHB/Wells Fargo Housing Market Index rose to 46 in November, following a rise to 43 in October, surpassing economists' forecasts of a slight increase to 44. This substantial uptick brings the index to its highest level since reaching 51 in April.