2018.10.0115:16:00UTC+00Treasuries Move To The Downside Amid Easing Trade Concerns

After closing roughly flat for two consecutive sessions, treasuries moved to the downside during the trading day on Monday.

Bond prices moved lower early in the day and remained firmly negative throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.4 basis points to 3.080 percent.

The weakness among treasuries came amid easing trade concerns after U.S. and Canadian officials agreed on a trade deal to replace the North American Free Trade Agreement shortly before a midnight deadline.

The new trade deal, called the United States-Mexico-Canada Agreement, or USMCA, will reportedly provide more market access to U.S. dairy farmers and effectively cap Canadian automobile exports to the U.S.

A joint statement by U.S. Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said the agreement will "strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home."

President Donald Trump, a harsh critic of NAFTA, also praised the USMCA as a "historic transaction" in a post on Twitter on Monday.

"It is a great deal for all three countries, solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduces Trade Barriers to the U.S. and will bring all three Great Nations together in competition with the rest of the world," Trump tweeted.

The leaders of the U.S., Canada, and Mexico are expected to sign the new agreement before the end of November, although it will still need to be approved by Congress.

Meanwhile, traders largely shrugged off a report from the Institute for Supply Management showing a modest slowdown in the pace of growth in the U.S. manufacturing sector.

The ISM said its purchasing managers index fell to 59.8 in September from 61.3 in August, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to edge down to 60.3.

The slightly bigger than expected decrease by the index came after it reached its highest level in over fourteen years in the previous month.

Amid a quiet day on the U.S. economic front, trading on Tuesday may be impacted by reaction to remarks by Federal Reserve Chairman Jerome Powell and Fed Vice Chairman Randal Quarles.