Treasuries Move Notably Lower As Trump's Health Improves
Following the turnaround seen in the previous session, treasuries showed a notable move to the downside during trading on Monday.
Bond prices fell sharply in morning trading and remained firmly negative throughout the afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed by 6.6 basis points to 0.762 percent.
With the upward move on the day, the ten-year yield reached its highest closing level in almost four months.
The weakness among treasuries came amid positive reports about President Donald Trump’s health after he was rushed to Walter Reed hospital on Friday.
In a video posted on Twitter late Sunday, Trump said he is “getting great reports from the doctors” regarding his battle with the coronavirus.
Trump revealed in a tweet late in the trading day that he will be releases from the hospital at 6:30 pm ET.
“Feeling really good! Don’t be afraid of Covid. Don’t let it dominate your life. We have developed, under the Trump Administration, some really great drugs & knowledge. I feel better than I did 20 years ago!” Trump tweeted.
The appeal of safe havens such as bonds was also reduced following the release of a report from the Institute for Supply Management showing activity in the U.S. service sector unexpectedly grew at a faster rate in the month of September’
The ISM said its services PMI rose inched up 57.8 in September from 56.9 in August, with a reading above 50 indicating growth in the service sector. Economists had expected the index to edge down to 56.3.
A report on the U.S. trade deficit may attract attention on Tuesday along with a speech by Federal Reserve Chairman Jerome Powell.
Bond traders are also likely to keep an eye on the results of the Treasury Department’s auction of $52 billion worth of three-year notes.