Treasuries Pull Back Sharply Amid Sell-Off By Greek Bonds

(RTTNews) - Following the rally seen last Friday, treasuries showed a significant move back to the downside during trading on Monday.

Bond prices fell sharply in morning trading before moving roughly sideways in the afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 8.7 basis points to 2.228 percent.

With the increase on the day, the ten-year yield nearly offset the 9.8 basis point loss posted in the previous session.

The sharp pullback by treasuries was partly due to a sell-off by Greek bonds, which came under pressure amid continued concerns about a default.

Greece continues to struggle to reach a deal with its creditors, with European Union Economic Commissioner Pierre Moscovici warning that the time remaining to reach an agreement is "very limited."

The weakness among treasuries also came as traders looked ahead to the release of some key economic data later in the week.

Reports on housing starts, existing home sales and consumer price inflation are likely to be in focus in the coming days.

Traders are also likely to keep an eye on the minutes of the latest Federal Reserve meeting as well as a speech by Fed Chair Janet Yellen.

Meanwhile, traders largely shrugged off a report from the National Association of Home Builders showing an unexpected deterioration in homebuilder confidence in the month of May.

The report said the NAHB/Wells Fargo Housing Market Index dropped to 54 in May after climbing to a reading of 56 in April. The pullback surprised economists, who had expected the index to inch up to 57.

Tuesday morning, the Commerce Department is scheduled to release a separate report on new residential construction in the month of April.

Economists expect housing starts to climb to an annual rate of 1.029 million in April from the 926,000 rate reported for March.