Treasuries Extend Downtrend Following Mixed Economic Data

(RTTNews) - Treasuries saw notable weakness during trading on Friday, extending the downward trend seen over the past several sessions.

Bond prices came under pressure in morning trading and remained firmly negative throughout the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, advanced 7.1 basis points to 2.117 percent.

With the increase, the ten-year yield closed higher for the fifth straight day, reaching its highest closing level in well over a month.

The continued weakness among treasuries may have reflected ongoing uncertainty about the outlook for interest rates following the release of a mixed batch of U.S. economic data.

The Institute for Supply Management released a report showing that activity in the manufacturing sector continued to expand in April, although the index of activity in the sector unexpectedly held steady.

The ISM said its purchasing managers index came in at 51.5 in April, unchanged from the reading reported for the previous month.

A reading above 50 indicates continued growth in the manufacturing sector, but economists had expected the index to edge up to 52.0.

While the index was unchanged, Bradley Holcomb, chair of the ISM Manufacturing Business Survey Committee, said 15 of the 18 manufacturing industries reported growth in April compared to only 10 in March, indicating a broader distribution of growth.

The Commerce Department released a separate report showing an unexpected drop in construction spending in the month of March.

The report said construction spending fell by 0.6 percent to annual rate of $966.6 billion in March from the revised February estimate of $972.9 billion.

Meanwhile, the University of Michigan said its consumer sentiment index for April came in at 95.9, unrevised from the mid-month reading and up from 93.0 in March.

The economic calendar for next week is relatively light, although traders are likely to keep a close eye on the monthly jobs report due next Friday.

Reports on service sector activity, international trade, and labor productivity may also attract attention along with a speech by Federal Reserve Chair Janet Yellen.