After initially showing a lack of direction, treasuries moved modestly higher over the course of the trading session on Monday.

Bond prices spent the morning lingering near the unchanged line before climbing more firmly into positive territory in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2.1 basis points to 2.936 percent.

With the drop on the day, the ten-year yield moved lower for the third consecutive session after closing above 3 percent for the first time in over four years last Wednesday.

The higher close by treasuries came as traders looked ahead to several key events later this week, including the Federal Reserve's monetary policy announcement on Wednesday.

The Fed is widely expected to leave interest rates unchanged, but traders are likely to pay close attention to the accompanying statement for clues about the outlook for rates.

Traders are also likely to keep an eye on the latest economic data, including the Labor Department's closely watched economic report due on Friday.

If that were not enough for traders to digest, Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer are due to travel to Beijing next week to hold trade talks with Chinese officials.

On the U.S. economic front, the Commerce Department released a report showing personal income increased by slightly less than expected in the month of March.

The report said personal income rose by 0.3 percent in March, matching the downwardly revised increase in February. Economists had expected income to climb by 0.4 percent.

Meanwhile, the Commerce Department said personal spending climbed by 0.4 percent in March after coming in unchanged in the previous month. The increase in spending matched economist estimates.

A separate report from the National Association of Realtors showed pending home sales increased by less than expected in the month of March.

NAR said its pending home sales index rose by 0.4 percent to 107.6 in March from a downwardly revised 107.2 in February. Economists had expected pending home sales to climb by 0.9 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Trading on Tuesday may be impacted by reaction to reports on activity in the manufacturing sector and construction spending.

by P2PNews Staff Writer

Market AnalysisBB

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