Treasuries moved notably higher over the course of the trading day on Monday, extending the upward trend seen over the past several sessions.
Bond prices moved to the upside in early trading and remained firmly positive throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dropped by 4.3 basis points to 2.228 percent.
The continued strength among treasuries came as stocks on Wall Street extended their recent downward trend, with the Dow falling to its lowest levels in nearly six months.
A sell-off by Chinese stocks contributed to the continued weakness on Wall Street, as the Shanghai Composite Index plunged by 8.5 percent.
The decrease, which marked the biggest percentage drop by the index since February of 2007, reflected concerns about the Chinese economy.
Meanwhile, bond traders seemed to shrug off a report from the U.S. Commerce Department showing a substantial rebound in durable goods orders in the month of June.
The report said durable goods orders jumped by 3.4 percent in June following a revised 2.1 percent decrease in May. Economists had expected orders to increase by 3.1 percent.
Excluding a significant increase in orders for transportation equipment, durable goods orders still rose by 0.8 percent in June compared to expectations for a 0.5 percent increase.
Reports on home prices and consumer confidence may attract some attention on Tuesday, although trading activity may be somewhat subdued ahead of the Federal Reserve’s monetary policy announcement on Wednesday.
The material has been provided by InstaForex Company – www.instaforex.com