Treasuries prices rose on Monday as investors looked for refuge in safer investments after a report stated U.S. business activity fell in March and a top government official unveiled a plan to overhaul financial regulation.

Two year treasury notes rose 3/32 in price to yield 1.602 percent. Ten Year notes were up 6/32 in price to yield 3.421.

Business activity contracted in March for the second straight months according to the National Association of Purchasing Management-Chicago. The index was at a better than expected 48.2 in March compared to 44.5 in February. A reading below 50 indicates contraction. Bloomberg economists surveyed ahead of the report had estimated a 46.3 reading.

Meanwhile U.S. Treasury Secretary Henry Paulson released details of a plan that would merge the regulatory agency controlling commodity futures with the one policing securities and exchanges while expanding the Federal Reserve's power in a bid to make U.S. financial markets more competitive.

This week the U.S. Labor Department will report on U.S. payrolls. The Institute for Supply Management is scheduled to report tomorrow.