After moving notably higher over the two previous sessions, treasuries gave back some ground during trading on Monday.
Bond prices regained some ground after coming under pressure early in the day but still closed in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2 basis points to 2.877 percent.
The pullback by treasuries came as traders cashed in on last Friday’s strong upward move, which came amid concerns about Turkey.
Traders continued to worry about the concerns about the financial crisis in Turkey, although Canaccord Genuity asset class strategist Brian Reynolds predicted the Turkish panic would be less impactful than the Greek financial panic circa 2010-2011.
Reynolds noted Turkey’s external debt, at $447 billion, is only about three-quarters of Greece’s when that country ran into trouble.
Additionally, Reynolds said Greek external debt was about 4 percent of U.S. GDP in 2010 and less than 11 percent of the U.S. public credit market, while Turkish external debt currently represents less than 2.5 percent of U.S. GDP and just over 5 percent of the U.S. public credit market.
Reynolds subsequently said, “The U.S. credit boom is likely going to persist and eventually take stocks higher after worries over this situation crest.”
The Turkish lira hit a new record low against the U.S. dollar in Asian trading before regaining some ground after Turkey’s central bank took measures to boost liquidity in the foreign exchange market.
Over the weekend, Turkish Finance Minister Berat Albayrak announced the government plans to calm the highly volatile financial markets.
A report from Reuters noted Albayrak pledged to take “necessary steps” but did not provide details on what those steps included.
Trading activity remained somewhat subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.
The economic calendar remains relatively light on Tuesday, although traders are likely to keep an eye on a report on import and exports prices in the month of July.