By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices rose higher on Monday, pushing yields down, after the Institute for Supply Management said its manufacturing index for June unexpectedly contracted slightly.
Yields on 10-year notes 10_YEAR -4.00% , which move inversely to prices, fell 8 basis points to 1.59%, from 1.63% before the report. A basis point is one one-hundredth of a percentage point.
Yields on 30-year bonds 30_YEAR -2.47% decreased 10 basis points to 2.69%.
Five-year yields 5_YEAR -7.02% slipped 5 basis points to 0.67%, completely reversing a jump last Friday.
Strategists at CRT Capital Group said that the price action has been volatile but all amounts to “noise within a range and err back to the expected illiquid trading around the mid-week holiday.”
Bond markets will close early on Tuesday and remain shuttered Wednesday for U.S. Independence Day.
ISM said its index dropped to 49.7 from 53.5 in May, falling under the 50-mark that signals contraction, for the first time since July 2009. Economists expected the index to remain above 50. See more on ISM.
The weak data pushed U.S. stocks into negative territory, with the S&P 500 Index SPX -0.12% lately down 0.4%.
Still to come this week are two key events: the European Central Bank’s monetary policy meeting on Thursday and the U.S. monthly payrolls report on Friday. Read about jobs report.
At the same time, worries about Europe simmer. Analysts noted media reports which indicated Finland and the Netherlands may balk at some of the bond-supporting programs that boosted risky assets like stocks last week.
Last week and month, bond yields rose as European Union leaders came out with a surprisingly strong plan to support the region’s banking sector, reducing demand for the safe haven of Treasurys. See more on Treasurys last week.
Deborah Levine is a MarketWatch reporter, based in New York.
