Treasuries Extend Rebound With Modestly Higher Close

(RTTNews) - Following the rebound seen over the course of the previous session, treasuries continued to regain ground during trading on Friday.

Bond prices fluctuated over the course of the trading day but finished the session modestly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.1 basis points to 1.748 percent.

The continued strength among treasuries was partly due to a steep drop by the price of crude oil, which pulled back further off Thursday's intraday highs.

Crude for March delivery tumbled $1.13 to $29.64 a barrel on the day amid lingering concerns about a global supply glut.

Trading activity was somewhat subdued, however, as traders expressed uncertainty about the outlook for the markets following recent volatility.

On the U.S. economic front, the Labor Department released a report early in the day showing consumer prices came in flat in the month of January.

The Labor Department said its consumer price index was unchanged in January after edging down by 0.1 percent in December. Economists had expected prices to dip by another 0.1 percent.

Meanwhile, the report said core consumer prices, which exclude food and energy prices, rose by 0.3 percent in January following an upwardly revised 0.2 percent increase in December.

Core prices had been expected to inch up by 0.1 percent, matching the uptick originally reported for the previous month.

The increase in core prices was the biggest since August of 2011 and reflected notably higher prices for shelter and medical care.

Compared to the same month a year ago, the headline consumer price index was up by 1.4 percent in January, while core prices were up by 2.2 percent.

Next week's trading may be impacted by the release of some key economic data, including reports on new and existing home sales, consumer confidence, and durable goods orders.

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.

The Treasury is due to sell $26 billion worth of two-year notes next Tuesday, $34 billion worth of five-year notes next Wednesday and $28 billion worth of seven-year notes next Thursday.