U.S. government debt prices rose on Monday as investors looked for safety after the release of weak European economic data stoked worries about the global economy.
The benchmark 10-year Treasury yield dropped more than 4 basis points to 1.7034% while the 2-year rate slid to 1.66%. Yields move inversely to prices.
German manufacturing activity dropped to its lowest level since the financial crisis this month, according to data from IHS Markit. Germany's services sector also grew at its slowest pace in nine months. Overall, manufacturing in the euro zone fell to a more than six-year low while services grew at is slowest pace in eight months, the data showed.
Yields in Europe also fell broadly. Germany's 10-year rate slid more than 7 basis points to negative 0.582%. France's benchmark yield fell to negative 0.289%. Italy's 10-year note yield dropped 9 basis points to 0.828%.
"These are not good numbers and they do not imply global economic stabilization is occurring," said Tom Essaye, founder of The Sevens Report, in a note.
U.S. manufacturing activity rebounded to a five-month high, IHS Markit said, but the firm noted the data was till near three-year lows. "Prospects also look gloomy, with inflows of new business down to the lowest since 2009."
Investors also kept an eye on U.S.-China trade developments. The U.S. and China described over the weekend last week's deputy-level trade talks as "constructive."
October's high-level trade talks remain on track, but a breakthrough appeared unlikely after President Donald Trump told reporters on Friday that he was "not looking" for a partial deal and Chinese officials canceled goodwill visits to U.S. farmers.
"When you look at the world as we know it right now, the risks out there still remain," said Gregory Faranello, head of U.S. rates at AmeriVet Securities, in a note. "Flexibility will be the key in the coming weeks. And in the end, the biggest driver going forward will be trade."