WASHINGTON (dpa-AFX) - Extending the strong upward move seen over the past few sessions, treasuries moved to the upside during trading on Monday.
Bond prices advanced early in the session and remained firmly positive throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell 4.0 basis points to 4.046 percent.
The ten-year yield closed lower for the fourth consecutive session, slumping to its lowest closing level since early April.
The continued strength among treasuries reflected optimism about the outlook for interest rates following last Friday's weaker-than-expected U.S. employment data.
Following the release of a closely watched report showing employment increased by much less than expected in the month of August, the Federal Reserve is widely expected to lower rates later this month.
CME Group's FedWatch Tool is currently indicating 88.2 percent chance the Fed will lower rates by a quarter point and a slim 11.8 percent chance of a half-point rate cut.
Trading activity was somewhat subdued, however, as traders looked ahead to the release of inflation data that could impact the outlook for rates.
The Labor Department is scheduled to release reports on producer price inflation and consumer price inflation on Wednesday and Thursday, respectively.
Economists currently expect the annual rate of producer price growth in August to come in unchanged from July at 3.3 percent.
The annual rate of growth by consumer prices is expected to accelerate to 2. 9 percent in August from 2.7 percent in July, while the annual rate of growth by core consumer prices, which exclude food and energy prices, is expected to hold at 3.1 percent.
A lack of major U.S. economic data may keep some traders on the sidelines on Tuesday ahead of the release of the inflation data later in the week.
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