After a resurgence at the end of last week, U.S. Treasury securities experienced a significant downturn in Monday's trading. Bond prices began with a slight decrease and continued to fall further as the session advanced. This resulted in the yield on the benchmark ten-year note increasing by 7.5 basis points, reaching 4.599 percent. This level marked the highest closing point in nearly seven months, completely offsetting the prior session's 4.6 basis point decline.
The decline in Treasury prices might have mirrored ongoing apprehensions about future interest rate trends, especially following the Federal Reserve's updated forecast suggesting fewer rate reductions next year than previously anticipated. Additionally, the pressure on bonds' attractiveness as a safe haven diminished, given lawmakers' success in formulating a last-minute agreement to prevent a government shutdown.
Investors appeared to mostly overlook the release of weaker-than-expected U.S. economic data, including a report from the Commerce Department that revealed a sharper-than-anticipated drop in durable goods orders for November. According to the report, durable goods orders fell by 1.1 percent in November, following a revised 0.8 percent increase in October. Economists had projected a 0.4 percent decline, as opposed to the initially reported 0.3 percent rise for the prior month.
Excluding the substantial decrease in transportation equipment orders, durable goods orders saw a minor decline of 0.1 percent in November after a slight 0.2 percent rise in October, whereas a 0.3 percent increase was anticipated. Conversely, the report indicated a 0.7 percent rise in orders for non-defense capital goods excluding aircraft, a vital measure of business investment, following a 0.1 percent fall in October.
In a separate development, the Conference Board released data showing an unexpected decline in consumer confidence for December. The consumer confidence index dropped significantly to 104.7 in December from a revised 112.8 in November, defying economists' predictions of an increase to 113.0 from the initially reported figure of 111.7 for the previous month.
With a lack of major U.S. economic data lined up, Tuesday might witness a volatile trading session in anticipation of the Christmas holiday on Wednesday.
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