U.S. Treasuries climbed following a report indicating that manufacturing declined again in September. The National Association of Purchasing Management said its factory index fell to 47 from 47.9 in August. A reading below 50 indicates a contraction in a sector, while a figure above 50 points to expansion. The NAPM survey did nothing to change expectations that the Federal Reserve's policymaking arm will cut short-term interest rates by 50 basis points Tuesday. The probable reduction, which would take the fed funds target rate to 2.5%, is being widely anticipated by economists and analysts.
The two-year note was recently up 1/32 to 99 27/32, pushing the yield down to 2.82%. Yields and prices move in opposite directions. The 10-year note was gaining 6/32 to 103 14/32, dropping the yield to 4.56%. The 30-year bond was up 7/32 to 99 18/32, yielding 5.40%.