After moving notably lower over the two previous sessions, treasuries regained some ground during the trading day on Monday.
Bond prices pulled back off their best levels in afternoon trading but still closed modestly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.6 basis points to 1.077 percent.
Treasuries benefited from their appeal as a safe haven amid uncertainty about more fiscal stimulus as a group of ten Republican Senators unveiled a scaled-down relief package.
The GOP proposal would cost approximately $618 billion, much less than President Joe Biden’s $1.9 trillion plan.
Direct payments to individuals would be cut to $1,000 under the Republican plan compared to the $1,400 under Biden’s proposal. The extension of unemployment benefits is also shortened under the GOP plan.
In U.S. economic news, the Institute for Supply Management released a report showing the pace of growth in U.S. manufacturing activity slowed more than expected in January.
The ISM said its manufacturing PMI declined to 58.7 in January from a downwardly revised 60.5 in December.
While a reading above 50 indicates continued growth in the manufacturing sector, economists had expected the index to show a more modest drop to 60.0.
Meanwhile, the Commerce Department released a separate report showing U.S. construction spending increased by slightly more than expected in the month of December.
The Commerce Department said construction spending jumped by 1.0 percent to an annual rate of $1.490 trillion in December after surging up by 1.1 percent to a rate of $1.476 billion in November. Economists had expected construction spending to climb by 0.9 percent.
Looking ahead, trading activity may be somewhat subdued on Tuesday amid a lack of major U.S. economic data.
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