WASHINGTON (dpa-AFX) - Extending the strong upward move seen in the previous session, treasuries moved modestly higher during trading on Monday.
Bond prices gave back some ground after an early advance but remained in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 2.2 basis points to 4.178 percent.
The modest strength among treasuries came as traders expressed optimism about the outlook for interest rates ahead of the Federal Reserve's monetary policy announcement on Wednesday.
The Fed is widely expected to leave interest rates unchanged, but traders will be looking to the accompanying statement to increase confidence about a rate cut in September.
According to CME Group's FedWatch Tool, there is currently an 89.6 percent chance the Fed will lower rates by a quarter point in September and a 10.1 percent chance of a half point rate cut.
Trading activity was somewhat subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.
Later in the week, the focus is likely to shift to the Labor Department's closely watched monthly jobs report for July.
Trading on Tuesday may be impacted by reaction to reports on home prices, consumer confidence and job openings, although activity may be somewhat subdued ahead of the Fed announcement on Wednesday.
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