Treasuries Close Modestly Higher But Off Best Levels

(RTTNews) - After initially showing a lack of direction, treasuries moved modestly higher over the course of the trading day on Monday.

Bond prices climbed into positive territory as the day progressed but gave back some ground going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.2 basis points to 2.425 percent.

The modest strength that emerged among treasuries reflected lingering geopolitical concerns as well as some disappointing economic data from Europe.

A report from the Federal Statistical Office showed that German factory orders fell 5.7 percent month-over-month in August following a 4.9 percent jump in July. The drop was much steeper than the 2.5 percent decrease expected by economists.

Traders also continued to digest last Friday's better than expected jobs report, which showed that strong job growth in September helped push the unemployment rate down to its lowest level in over six years.

While the report points to strength in the economy, analysts have suggested that subdued wage growth is likely to keep the Federal Reserve from jumping the gun on raising interest rates.

Nonetheless, trading activity was somewhat subdued, with a lack of major U.S. economic data keeping some traders on the sidelines.

The economic calendar remains relatively light throughout the week, although traders are likely to keep a close eye on the release of the minutes of the latest Fed meeting.

Amid another quiet day on the economic front, trading on Tuesday may be impacted by the results of the Treasury Department's auction of $27 billion worth of three-year notes.