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US Treasury yields higher amid strong economic data, tax reform hopes

U.S. government debt yields rose Monday amid growing optimism over tax reform from Washington and strong economic data.

The yield on the benchmark 10-year Treasury notes, which moves inversely to price, was higher at around 2.334 percent, as was the yield on the 30-year Treasury bond, at 2.856 percent.

U.S. Markets Overview: Treasurys chart

Republicans unveiled sweeping changes to America's tax code last week in a proposal that dramatically lowers taxes on businesses and many households but remains unclear on issues such as how to pay for it all.

The framework, a production of the Trump administration and Republican leadership, calls for lowering the corporate rate from 35 to 20 percent. It would also bring down the rate for so-called pass-through businesses to 25 percent.

On Friday, he said he would make a decision on the next Federal Reserve chair in the next two to three weeks.

Rumours that Kevin Warsh could replace Yellen have sent the U.S. dollar higher given his hawkish views.

On the data front, U.S. factory activity surged to a more than 13-year high in September amid strong gains in new orders and raw material prices, pointing to underlying strength in the economy even as Hurricanes Harvey and Irma are expected to dent growth in the third quarter, according to Reuters.

The Institute for Supply Management (ISM) said its index of national factory activity surged to a reading of 60.8 last month, the highest reading since May 2004.

In oil markets, prices fell Monday after posting gains of 20 percent in the third quarter. Brent crude traded at $55.57 a barrel, down 2.13 percent, while U.S. crude was down nearly 3 percent at $50.14 barrel.