Treasuries Climb Off Early Lows But Still End In The Red

(RTTNews) - After moving sharply lower early in the session, treasuries regained ground over the course of the trading day on Monday.

Bond prices climbed well off their early lows but remained in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose 3.4 basis points to 4.475 percent after reaching a high of 4.562 percent.

The initial weakness among treasuries came in reaction to news that Moody's has downgraded the U.S. debt rating by a notch to Aa1 from Aaa.

Moody's said the downgrade reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns.

Selling pressure waned over the course of the session, however, as Moody's also said the U.S. retains exceptional credit strengths such as the size, resilience and dynamism of its economy and the role of the US dollar as global reserve currency.

On the U.S. economic front, the Conference Board released a report showing its reading on leading U.S. economic indicators slumped by more than expected in the month of April.

The report said the leading economic index tumbled by 1.0 percent in April after sliding by a downwardly revised 0.8 percent in March.

Economists had expected the leading economic index to decrease by 0.8 percent compared to the 0.7 percent drop originally reported for the previous month.