Treasuries Give Back Ground Ahead Of Next Week's Fed Meeting

(RTTNews) - After turning higher over the course of the previous session, treasuries moved back to the downside during trading on Friday.

Bond prices regained ground after seeing early weakness but remained in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose 3.1 basis points to 3.745 percent.

The pullback by treasuries came as traders continued to look ahead to the Federal Reserve's monetary policy meeting next week.

Yesterday's report showing initial jobless claims jumped to their highest level since October 2021 last week added to the optimism about the Fed pausing its interest rates hikes, as the central bank has warned about the impact of labor market tightness.

Key inflation reports are also likely to be in the spotlight next week, as the data could have a significant impact on the outlook for interest rates.

CME Group's FedWatch Tool is currently indicating a 72.4 percent chance the Fed will leave rates unchanged next week but a 52.0 percent chance of another quarter point rate hike in July.

Overall trading activity remained somewhat subdued, however, as a lack of major U.S. economic data kept some traders on the sidelines.

The inflation data and the Fed meeting are likely to be in focus early next week, while reports on retail sales, industrial production and consumer sentiment may attract attention later in the week.