Treasuries Close Modestly Lower Following Lackluster Session

Treasuries fluctuated over the course of the trading session on Monday before ending the day modestly lower.

Bond prices showed wild swings in morning trading before drifting lower over the course of the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.1 basis points to 4.234 percent.

The ten-year yield more than offset the 1.3 basis point dip seen last Friday, ending the session at a new fourteen-year closing high.

The choppy trading on the day came amid uncertainty about the outlook for interest rates in the U.S. ahead of next week’s Federal Reserve meeting.

The Fed is widely expected to raise interest rates by another 75 basis points next week, but traders are hopeful the central bank will indicate plans to slow the pace of rates hikes beginning in December.

The optimism partly stems from a Wall Street Journal report suggesting some Fed officials have expressed greater unease with the aggressive pace of rate hikes.

A lack of major U.S. economic data may also have kept traders on the sidelines ahead of the release of a personal income and spending report that includes a reading on inflation said to be preferred by the Fed.

In the coming days, traders are also likely to keep an eye on reports on consumer confidence, new home sales, and durable goods orders and third quarter GDP.

Trading activity may remain somewhat subdued, however, as traders look ahead to the Fed’s monetary policy meeting next week.

Looking ahead, trading on Tuesday may be impacted by reaction to the Conference Board’s report on consumer confidence in the month of October.

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