After ending the previous session notably higher, treasuries gave back some ground during the trading day on Monday.
Bond prices came under pressure early in the session but climbed well off their worst levels as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1 basis point to 3.087 percent.
Treasuries initially came under pressure amid a rebound on Wall Street, with stocks moving back to the upside following the sharp drop seen last week.
Bargain hunting contributed to the rebound by stocks along with news on the merger-and-acquisition front as well as a report China is considering cutting a tax on car purchases in half.
Traders looked to treasuries as a safe haven late in the session, however, lifting bond prices well off their lows of the session.
The recovery attempt by treasuries came after a report from Bloomberg said the U.S. is preparing to announce tariffs on all remaining Chinese imports if next month’s talks between Presidents Donald Trump and Xi Jinping fail to ease the trade war.
Citing three people familiar with the matter, Bloomberg said the announcement of the new round of tariffs could come by early December
Two of the people told Bloomberg the new tariffs would apply to Chinese imports that aren’t already covered by previous rounds of tariffs, or approximately $257 billion worth of goods.
Meanwhile, traders largely shrugged off a report from the Commerce Department showing personal income rose by slightly less than expected in the month of September.
The report said personal income edged up by 0.2 percent in September after climbing by an upwardly revised 0.4 percent in August. Economists had expected income to rise by 0.3 percent.
The Commerce Department also said personal spending rose by 0.4 percent in September after increasing by an upwardly revised 0.5 percent in August. The increase in spending matched economist estimates.
A reading on inflation said to be preferred by the Federal Reserve showed the annual rate of core consumer price growth held at 2.0 percent for the fifth straight month.
Further news regarding another round of tariffs on Chinese imports may impact trading on Tuesday along with a report on consumer confidence in the month of October.