Treasuries Close Roughly Flat After Seeing Early Weakness

After an early move to the downside, treasuries regained ground over the course of the trading day before closing roughly flat.

Bond prices climbed off their worst levels of the day, spending the latter part of the session lingering near the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, ended the day flat at 1.782 percent after reaching a high of 1.816 percent.

Treasuries ended the day little changed as traders looked ahead to the Labor Department’s closely watched monthly jobs report on Friday.

Economists currently expect employment to increase by 155,000 jobs in January after rising by 199,000 jobs in December. The unemployment rate is expected to hold at 3.9 percent.

The strength of the monthly jobs data could impact expectations regarding how fast the Federal Reserve will raise rates from near-zero levels in an effort to fight inflation.

Reports on manufacturing and service sector may also attract attention in the coming days along with preliminary data on labor productivity and costs in the fourth quarter.

Bond traders may also have been reluctant to make significant moves ahead of monetary policy decisions by the Reserve Bank of Australia, the European Central Bank and the Bank of England.

In U.S. economic news, MNI Indicators released a report showing Chicago-area business activity unexpectedly grew at a faster rate in the month of January.

MNI Indicators said its Chicago business barometer rose to 65.2 in January from an upwardly revised 64.3 in December, with a reading above 50 indicating growth.

The increase surprised economists, who had expected the Chicago business barometer to drop to 61.7 from the 63.1 originally reported for the previous month.

Trading on Tuesday may be impacted by reaction to reports on manufacturing activity, construction spending and job openings.

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