Bonds Close Higher On Monday After Moving Off A Multi-Month Low, Monday, June 04, 2007 3:40:34 PM

Bonds climbed on Monday, helped by weaker stocks that offered an opportunity for bargain hunters after weeks of heavy selling. The buying during the trading day moved bonds off a multi-month low that they closed at on Friday. Also driving the buying throughout the session was an 8% drop in the Chinese Stock Market, which brought back fears of a decline on Wall Street similar to the massive stock sell-off that took place in February.

The 10-year yield began the session lower, moving off the 9-month high that it closed at on Friday. The yield declined for most of the session, with sellers making a few unsuccessful attempts to enter the markets, one being with the release of data on lower-than-expected factory orders.

The 10-year yield declined into the afternoon, but pulled off its low for the session shortly before the close. The 10-year yield finished Monday`s trading at 4.929%, down 2.7 basis points on the day. Investors will be closely watching the bond market this week, to see if the benchmark yield reaches the 5.0% level for the first time since last summer.

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