NEW YORK: Prices for US Treasuries rose on Monday after data showing US manufacturing growth slowed in March fed worries about the strength of the recovery in the world's biggest economy, kicking off a week heavy in key figures on the labor market.
The Institute for Supply Management said its index of national factory activity fell to 51.3 from 54.2 in February. A reading above 50 indicates expansion in the manufacturing sector. New orders, a key indicator of future growth, accounted for much of the drop in the index.
"The weaker-than-expected ISM manufacturing report was really the big bullish trigger for today's session," said Ian Lyngen, a senior government bond strategist at CRT Capital Group in Stamford, Connecticut.
Stocks retreated from record highs in the wake of the data, and prices for Treasuries reversed early losses to advance.
"Since manufacturing has been a bright spot in the economy lately, the weaker-than-expected reading had an outsized effect on the market," said Thomas Simons, vice president and money market economist at Jefferies & Co in New York.
Trading resumed on Monday after an early close on Thursday and a closure on Friday for the Good Friday holiday in the United States. Trading on Monday was subdued, with markets in most of Europe shut for Easter.
Ten-year Treasuries, falling in price before the data, advanced to trade up 4/32, yielding 1.840 percent, down slightly from 1.85 percent late on Thursday.
This week will bring a full slate of economic data, especially on jobs. The ADP employment report comes on Wednesday, the latest weekly jobless claims figures on Thursday, and the influential nonfarm payrolls report from the US Labor Department on Friday.
Payrolls will be closely scrutinized for signs of further improvement in hiring. The report is expected to show that 200,000 jobs were added in March, according to the median estimate of economists polled by Reuters.
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