US Treasuries prices gained on Monday as global equity prices fell amid concerns over sluggish economic growth in China and falling commodity prices, ahead of Friday's highly anticipated employment report. Worries about slowing global growth and a selloff in commodities reduced investor appetite for risk and increased demand for safe-haven bonds, even as US data shows a still-strengthening economy.
A 30 percent plunge in shares of London-listed mining and trading company Glencore and an 8.8 percent drop in Chinese industrial firms' profits triggered the most recent investor anxiety, dragging copper below $5,000 a tonne. "Weaker-than-expected Chinese industrial profits and a continued selloff in commodities carried on through the day and we saw a flight to quality with tens and thirties outperforming the front end of the curve," said Ian Lyngen, senior government bond strategist at CRT Capital Group in Stamford, Connecticut.
Yields briefly rose from their session lows on Monday after New York Federal Reserve President William Dudley said he expects the US central bank to raise interest rates this year for the first time in nearly a decade. Dudley said he was confident weak global economic conditions and the strong US dollar would not permanently hold down inflation in the US or dislodge expectations about the path of price increases.
Some investors have pushed back their expectations on when the Fed is expected to raise rates after the US central bank kept rates on hold at its September meeting. Traders and analysts are listening closely to this week's speeches from Fed members including Chair Janet Yellen, Governor Lael Brainard and Chicago President Charles Evans for clues as to whether the central bank will increase rates in October or December.
The next major focus for the market will be Thursday's manufacturing data and Friday's employment report for September, both of which, analysts said, could sway the central bank to boost rates by year end. In afternoon US trading, 10-year Treasuries were up 20/32 in price to yield 2.096 percent, down from 2.164 percent late on Friday. The 30-year bond rose as much as 1-24/32 in price to yield 2.869 percent, its lowest in a month, during afternoon trading.