WASHINGTON (dpa-AFX) - Treasuries showed a lack of direction over the course of the trading day on Monday, extending the lackluster performance seen during last Friday's session.
Bond prices once again spent the day bouncing back and forth across the unchanged before closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, crept up by less than a basis point to 4.106 percent.
The choppy trading on the day came as traders seemed reluctant to make more significant moves ahead of the release of payroll processor ADP's report on private sector employment on Wednesday.
With the ongoing government shutdown indefinitely delaying several key U.S. economic reports, the ADP report could shed light on the strength of the labor market amid uncertainty about the outlook for interest rates.
CME Group's FedWatch Tool is currently indicating a 66.4 percent chance the Federal Reserve will lower rates by another quarter point last month, although that is down from 94.4 percent a week.
Last week, Fed Chair Jerome Powell said a further reduction in rates in December is 'not a foregone conclusion,' noting Fed officials had 'strongly differing views about how to proceed' at the final meeting of the year.
Bond traders seemed to shrug off a report from the Institute for Supply Management showing U.S. manufacturing activity unexpectedly contracted at a slightly faster rate in the month of October.
The ISM said its manufacturing PMI slipped to 48.7 in October after edging up to 49.1 in September, with a reading below 50 indicating contraction. Economists had expected the index to inch up to 49.5.
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