Treasuries Close Higher Amid Global Stock Sell-Off

(RTTNews) - Benefiting from their appeal as a safe haven amid a global stock market sell-off, treasuries moved higher during trading on Monday.

Bond prices showed a strong move to the upside in early trading but gave back some ground going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2.4 basis points to 2.245 percent.

The strength among treasuries came as stocks around the world fell sharply amid renewed concerns about the global economy.

Chinese stocks showed a substantial drop on the day, dragging the Shanghai Composite Index down by 6.9 percent and triggering a trading halt.

Disappointing manufacturing data contributed to the weakness among Chinese stocks, as a report from Markit and Caixin showed that their index of Chinese manufacturing activity continued to indicate a contraction in December.

Treasuries also benefited from the release of some disappointing U.S. data, including a report from the Institute for Supply Management showing a continued contraction in manufacturing activity.

The ISM said its purchasing managers index edged down to 48.2 in December from 48.6 in November, with a reading below 50 indicating a contraction.

The modest drop came as a surprise to economists, as the consensus estimate called for the index to inch up to a reading of 49.2.

With the unexpected decrease, the manufacturing index dropped to its lowest level since hitting 45.8 in June of 2009.

A separate report from the Commerce Department showed an unexpected decrease in construction spending in the month of November.

Amid a quiet day on the U.S. economic front, trading activity on Tuesday may be somewhat subdued as traders look ahead to key reports due later in the week.