Treasuries Give Back Ground Following Recent Strength

After moving sharply higher over the past several sessions, treasuries gave back some ground during trading on Friday.

Bond prices came under pressure over the course of morning trading and remained firmly negative throughout the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 5.7 basis points to 3.125 percent.

With the increase on the day, the ten-year yield rebounded after ending the previous session at a two-week closing low.

Traders cashed in on some of the recent strength in the markets amid a rally on Wall Street, with stocks extending the strong upward move seen going into the close of trading on Thursday.

On the U.S. economic front, the Commerce Department released a report unexpectedly showing a significant rebound in new home sales in the month of May.

The report showed new home sales surged 10.7 percent to an annual rate of 696,000 in May after plunging 12.0 percent to an upwardly revised rate of 629,000 in April.

The spike surprised economists had expected new home sales to dip 0.5 percent to an annual rate of 588,000 from the 591,000 originally reported for the previous month.

Meanwhile, a separate report from the University of Michigan showed consumer sentiment in the U.S. tumbled by slightly more than initially estimated in the month of June.

The report showed the consumer sentiment index for June was downwardly revised to 50.0 from the preliminary reading of 50.2.

The consumer sentiment index is down sharply from the final May reading of 58.4, plunging to its lowest level on record.

Next week’s trading may be impacted by reaction to reports on durable goods orders, pending home sales, consumer confidence, personal income and spending and manufacturing activity.

Bond traders are also likely to keep an eye on the results of the Treasury Department’s auctions of two-year, five-year and seven-year notes.

Source: Read Full Article