Treasuries Close Slightly Lower After Seeing Early Strength

(RTTNews) - After once again failing to sustain an initial upward move, treasuries turned lower over the course of the trading session on Monday.

Bond prices pulled back well off their early highs, eventually ending the session modestly below the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by nearly a basis point to 2.469 percent.

Treasuries initially benefited from Chinese trade data pointing to sluggish domestic demand in the world's second largest economy.

While the report from Chinese Customs said exports jumped 9.4 year-over-year in August, imports unexpectedly fell by 2.4 percent compared to the same month a year ago.

The Chinese trade surplus subsequently widened to a record high $49.8 billion in August from $47.3 billion in July.

Ongoing concerns about the situation in Ukraine and the possibility of Scotland voting for independence also contributed to the appeal of treasuries.

Buying interest waned over the course of the morning, however, as analysts widely believe the Federal Reserve's plan to normalize monetary policy remains on track despite last week's disappointing jobs report.

Many analysts expect the weak job growth reported last Friday to be a temporarily blip in light of other largely upbeat economic data.

Traders may also have been looking ahead to this week's auctions of three-year and ten-year notes and thirty-year bonds.

The Treasury Department is due to sell $27 billion worth of three-year notes on Tuesday, $21 billion worth of ten-year notes on Wednesday and $13 billion worth of thirty-year bonds on Thursday.

Results of the three-year note auction are likely to be in focus on Tuesday amid another quiet day on the U.S. economic front.