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10-Year and 2-Year Treasury Yields Fall as Traders Begin New Quarter

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The yields on the 10-year and 2-year Treasurys fell on Monday as markets began a new quarter and investors digested manufacturing PMI data.

The benchmark 10-year Treasury was down 15 basis points at 3.647%. The yield on the policy-sensitive 2-year Treasury was at 4.118%, down by about 9 basis points.

Yields and prices have an inverted relationship. One basis point is equivalent to 0.01%.

Markets began the final quarter of the year on Monday, with investors still digesting the negative end to the third quarter that saw the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite stumble.

A gauge on the U.S. manufacturing sector fell last month, indicating that economic activity in the space is close to contracting.

The Institute for Supply Management said Monday that its manufacturing PMI fell to 50.9 in September{

ISM manufacturing PMI dips, now teetering on potential contraction

A gauge on the U.S. manufacturing sector fell last month, indicating that economic activity in the space is close to contracting.

The Institute for Supply Management said Monday that its manufacturing PMI fell to 50.9 in September from 52.8 in August — barely in expansion territory. A print below 50 indicates contraction, and one above that level points to an expansion.

The new orders and prices indexes — two key components of the overall PMI —fell to 47.1 and 51.7, respectively. The latter reached its lowest level since June 2020.

"The U.S. manufacturing sector continues to expand, but at the lowest rate since the pandemic recovery began," Timothy R. Fiore, chair of the ISM Manufacturing Business Survey Committee, said in a statement. "Following four straight months of panelists' companies reporting softening new orders rates, the September index reading reflects companies adjusting to potential future lower demand."

— Fred Imbert

Several Federal Reserve speakers are also due to make comments. In remarks last week, the central bankers had struck a hawkish tone and broadly indicated that they would continue to fight persistently high inflation by hiking interest rates.

That has raised concerns about a recession among some investors who fear the central bank is hiking rates too quickly.

 

—CNBC's Fred Imbert contributed reporting.

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