Money and Metals

Reuters reports on the treasury markets and the yield curve. "U.S. Treasury debt prices were mixed in quiet pre-holiday trade on Monday, as a soft reading of a construction industry index added to buying flows that were already in the market. The day's most interesting feature was a repeat of last week's inversion of the front end of the yield curve."

"Two-year notes were again yielding more than both three and five-year debt, though traders and strategists cautioned that thin pre-holiday trade clouded the significance of the move. Two-year notes were yielding nearly 2 basis points more than both three-year and five-year debt, and only 6 basis points fewer than 10 year notes, compared with 8 basis points late on Friday."

"'I haven't seen the flows, but it sure seems like there's some rate-locking going on,' said Gerald Lucas, a Treasury and agency debt strategist at Banc of America Securities."

"The market is now looking toward data on U.S. housing starts and producer prices due out on Tuesday."