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 early lows but still ended the day slightly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by nearly a basis point to 1.584 percent after reaching a high of 1.627 percent.
The early weakness among treasuries came as the Federal Reserve is widely expected to begin scaling back its asset purchase program as early as next month.
However, treasuries regained ground after the Federal Reserve released a report unexpectedly showing a steep drop in industrial production in the month of September.
The Fed said industrial production tumbled by 1.3 percent in September following a revised 0.1 percent dip in August.
The sharp decline surprised economists, who had expected industrial production to edge up by 0.2 percent compared to the 0.4 percent increase originally reported for the previous month.
The report said manufacturing output fell by 0.7 percent, with the production of motor vehicles and parts plunging by 7.2 percent amid the semiconductor shortage.
Utilities output also plummeted by 3.6 percent, as demand for cooling subsided after a warmer-than-usual August, while mining production slumped by 2.3 percent due to the lingering effects of Hurricane Ida.
Meanwhile, a separate report released by the National Association of Home Builders showed a notable improvement in U.S. homebuilder confidence in the month of October.
The report said the NAHB/Wells Fargo Housing Market Index climbed to 80 in October from 76 in September. Economists had expected the index to come in unchanged.
On Tuesday, the Commerce Department is scheduled to release a separate report on new residential construction in the month of September.
Housing starts are expected to rise to an annual rate of 1.620 million in September from 1.615 million in August, while building permits are expected to drop to a rate of 1.680 million from 1.728 million.
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