WASHINGTON (dpa-AFX) - After moving to the downside early in the session, treasuries moved modestly higher over the course of the trading day on Monday.
Bond prices climbed off their early lows and into positive territory before moving roughly sideways in afternoon trading. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.3 basis points to 3.697 percent.
The ten-year yield moved lower for the five consecutive session, falling to its lowest closing level in over a year.
Treasuries continued to benefit from optimism about the outlook for interest rates ahead of the Federal Reserve's monetary policy meeting later this month.
The Fed is widely expected to lower interest rates at the meeting, although there is some debate about the size of the rate cut.
CME Group's FedWatch Tool is currently indicating a 71 percent chance the Fed will lower rates by 25 basis points and a 29 percent chance of a 50 basis point rate cut.
Later this week, the Labor Department is scheduled to release reports on consumer and producer price inflation that could impact the outlook for rates.
The reports are expected to show a slowdown by the annual rate of consumer price growth but an acceleration by the annual rate of producer price growth.
A lack of major U.S. economic data may lead to relatively light trading on Tuesday ahead of the closely watched inflation data.
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