Bonds

10-year yield tops 1.9% as December rate rise continues

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U.S. government debt prices were lower on Monday amid a quiet trading week due to the holiday season.

The yield on the benchmark 10-year Treasury note, which moves inversely to price, rose about 6 basis points to around 1.921%, while the yield on the 30-year Treasury bond was also higher at around 2.371%.

Investors have been adding more risk on trade-deal optimism, ditching bonds as U.S. equities rally into the end of the year. The benchmark 10-year yields have bounced back this month, climbing about 15 basis points since the beginning of December.

Market participants continue to monitor global trade developments as the new year approaches. Optimism over trade talks between the U.S. and China led to stock rally. The two largest world economies are set to sign a phase one trade deal in January.

Chinese Vice Premier Liu He, the nation's top trade negotiator, will visit Washington this week to sign the agreement. 

On the data front, the advance report on the U.S. trade in goods on Friday showed the trade deficit shrank to its narrowest since 2016 in November. U.S. trade balance came to $63.2 billion, lower than the estimates of $68.8 billion.

The December Chicago manufacturing index remained below 50 in November, but rose slightly to 48.9 from 46.3 in October. Any reading below 50 signals an expansion in the sector.

Meanwhile, a 13-week, a 26-week and a 52-week bill is set to be auctioned on Monday.