Bonds gain as Wall Street’s rally peters out

U.S. sovereign bonds traded higher on Monday, as the Wall Street rally petered out and risk aversion rose following a failed coup in Turkey.

Benchmark 10-year Treasury notes edged lower to yield 1.5887 percent, having closed the previous session at 1.59 percent. Bond prices move inversely to yields.

Thirty-year bonds rose to yield 2.3043 percent.

US Treasurys

German bunds, which are perceived as a safe-haven asset akin to Treasury notes, also rose on Monday.
Tensions were high in the U.S. after three police officers were shot dead in the city of Baton Rouge by a gunman on Sunday. President Barack Obama condemned the killings and called for a measured response ahead of party conventions.

The U.S. dollar fell back slightly against the Turkish lira and traded flat against a basket of currencies early on Monday. This followed an unsuccessful attempt to overthrow Turkish President Recep Tayyip Erdogan late on Friday.

The European Central Bank also published its first weekly list on who its bought corporate bonds from under its expanded asset purchasing program.

The heavy part of second-quarter earnings season will get underway on Monday, with numbers expected from Charles Schwab, IBM, Netflix and Yahoo.

Both Bank of America and Hasbro posted quarterly earnings that trumped expectations before Wall Street opened on Monday.

Earnings growth for the S&P 500 companies is expected to fall by 4.7 percent in the second quarter, based on expectations and actual reports from the several dozen companies that have reported, according to Reuters.

A monthly reading of builder confidence from the National Association of Home Builders dropped a point to 59.

—With contribution from CNBC’s Patti Domm