Following the strong upward move seen last week, treasuries saw some further upside during the trading session on Monday.

Bond prices gave back some ground after an early rally but remained firmly in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 4.7 basis points to 1.708 percent.

Treasuries benefited from their appeal as a safe haven amid concerns about the about the global economic outlook following the release of disappointing European economic data.

Survey data from IHS Markit showed the euro area private sector was close to stalling at the end of the third quarter. The flash composite output index unexpectedly fell to a 75-month low of 50.4 in September from 51.9 in August.

Germany’s private sector contracted the most since late 2012 as a downturn in manufacturing deepened and service sector growth lost momentum.

Waning optimism about a potential U.S.-China trade deal also contributed to the early rally after the Chinese cut short a visit to the U.S. last week and President Donald Trump indicated he is not in a hurry to reach an agreement.

Trading on Tuesday may be impacted by reaction to the Conference Board’s report on consumer confidence in the month of September.

Bond traders are also likely to keep an eye on the results of the Treasury Department’s auction of $40 billion worth of two-year notes.

The material has been provided by InstaForex Company – www.instaforex.com