On Monday, Treasuries experienced a notable upward movement, recovering from the decline observed last Friday. Bond prices saw a significant rise early in the session and maintained a robust positive trajectory throughout the day. As a result, the yield on the benchmark ten-year note, which inversely correlates with its price, fell by 7.4 basis points to 4.545 percent.
The strength observed in Treasuries could be attributed to bargain hunting, as the ten-year yield closed above 4.6 percent on Friday for the first time since late May. In recent weeks, Treasuries have surged significantly, partly due to the Federal Reserve's forecast of fewer interest rate cuts in 2025 than previously estimated. Concerns over how President-elect Donald Trump's policies might impact the U.S. budget deficit may have also affected Treasuries.
In U.S. economic developments, the National Association of Realtors released a report indicating that pending home sales increased substantially more than anticipated in November. The NAR noted that its pending home sales index rose by 2.2 percent to 79.0 in November, following a 1.8 percent increase to 77.3 in October. Economists had predicted a 0.7 percent rise in pending home sales.
The pending home sales index showed growth for the fourth consecutive month, achieving its highest level since February 2023.
With the absence of significant U.S. economic data, Tuesday may witness light trading as some traders start their New Year's Eve festivities early.
