After coming under pressure early in the session, treasuries regained ground over the course of the trading day on Monday.
Bond prices climbed well off their worst levels of the day but still closed modestly lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.8 basis points to 1.575 percent.
The early weakness among treasuries came after a report released by the Institute for Supply Management on Monday showed a modest slowdown in the pace of growth in U.S. manufacturing activity in the month of October.
The ISM said its manufacturing index edged down to 60.8 in October from 61.1 in September, although a reading above 50 still indicates growth. Economists had expected the index to dip to 60.5.
Meanwhile, the Commerce Department released a report showing construction spending in the U.S. unexpectedly decreased in the month of September.
The report said construction spending fell by 0.5 percent to an annual rate of $1.574 trillion in September after inching up by 0.1 percent to a revised rate of $1.582 trillion in August.
The drop in construction spending came as a surprise to economists, who had expected spending to increase by 0.4 percent.
Trading activity was somewhat subdued, however, as traders looked ahead to the Federal Reserve’s monetary policy announcement on Wednesday.
The Fed is likely to leave interest rates unchanged but could announce plans to begin scaling back its asset purchase program.
A lack of major U.S. economic data may lead to another light trading day on Tuesday, as traders continue to await the latest Fed announcement.