NEW YORK, Feb 2 (Reuters) - U.S. Treasuries prices pared earlier losses early Monday as disappointing data on domestic manufacturing and construction spending raised expectations the Federal Reserve might not raise interest rates this year.
The Institute for Supply Management (ISM) said its index of national factory activity fell to 53.5 in January from 55.1 in December. The reading was shy of expectations of 54.5, according to a Reuters poll of economists.
At the same time, the U.S. Commerce Department said construction spending rose at an annualized rate of 0.4 percent in December, falling short of a 0.7 percent increase forecast among economists polled by Reuters.
Benchmark 10-year Treasuries notes were last up 5/32 in price for a yield of 1.662 percent, down 2 basis points from late on Friday. Before the data, they were down about 2/32 with a yield of 1.690 percent. (Reporting by Richard Leong)