Treasury bonds started June on a down note Monday morning after a strong rally in May as an upbeat report from China sapped demand for safety assets. In recent trading, the 10-year note was 12/32 lower, yielding 2.502%, according to Tradeweb. When bond yields rise, their prices fall.

Bond prices pulled back for a third straight session. Investors have cashed in some chips after the yield on the benchmark 10-year note dropped to the lowest level in more than six months last week.

“The buying is done for now,” said Thomas Roth, executive director in the U.S. government bond trading group at Mitsubishi UFJ Securities (USA) Inc. in New York.

The 10-year yield touched 2.401% on May 29, its weakest level since late October. The yield has tumbled from about 3% at the start of the year.

The sharp decline in bond yields underscores anxiety among investors about the global economic outlook, which has boosted the allure of U.S. government debt as a haven. Recently several U.S. central bank policy makers have signaled their intention to keep interest rates near zero for longer to boost growth, which bolstered investors’ confidence to buy bonds.

On Monday, worries over China’s economy receded some after an official gauge of the nation’s manufacturing sector hit a five-month high. The official purchasing managers index was 50.8 in May, up from 50.4 in March. A reading above 50 signals expansion of the industry.

Michael Woolfolk, a global-markets strategist at Bank of New York Mellon in New York, said the 10-year Treasury yield below 2.50% “looks very hard to justify” with the Federal Reserve ending bond purchases this year and looking to begin raising rates six to 12 months after that amid signs of an improving economy.

By Min Zeng