Treasuries Climb Off Worst Levels But Still Close Lower

Treasuries regained ground after coming under pressure in morning trading on Monday but still ended the day in negative territory.

Bond prices moved to the downside going into the close, as an afternoon recovery attempt faltered. As a result, the yield on the benchmark ten-year note, which moves opposite of is its price, rose by 4.1 basis points to 1.996 percent.

The volatility in the bond markets came as kept a close eye on developments regarding the tensions between Ukraine and Russia.

President Joe Biden spoke with Russian President Vladimir Putin over the weekend, with a senior administration official describing the call as “professional and substantive” but noting there was “no fundamental change in the dynamic that has been unfolding now for several weeks.”

“We believe that we have put ideas on the table that would be in our and our allies’ interest to pursue, that would enhance European security, and that would also address some of Russia’s stated concerns,” the official said in a call with reporters.

The official added, “But it remains unclear whether Russia is interested in pursuing its goals diplomatically as opposed to through the use of force.”

Russian Foreign Minister Sergey Lavrov told Putin in remarks aired on Russian state television on Monday that “there is always a chance” that diplomacy could still work.

Traders also remained wary about the outlook for monetary policy following mixed remarks by Federal Reserve officials.

While St. Louis Fed President James Bullard told CNBC he favors front-loading planned interest rate increases, San Francisco Fed President Mary Daly told CBS’ “Face The Nation” she prefers a measured pace of rate hikes.

Developments in Ukraine are lightly to remain in the spotlight on Thursday, although traders are also likely to keep an eye on a report on producer price inflation.

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