Treasuries Move Higher On Disappointing Economic Data

(RTTNews) - After trending lower over the past few sessions, treasuries regained some ground over the course of the course of the trading day on Friday.

Bond prices initially showed a lack of direction but climbed firmly into positive territory as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.9 basis points to 1.752 percent.

The rebound by treasuries came following the release of some disappointing U.S. economic data, including a report from the Federal Reserve showing a much bigger than expected drop in industrial production in March.

The Fed said industrial production fell by 0.6 percent in March, matching the downwardly revised drop reported for February. Economists had expected production to edge down by 0.1 percent.

The bigger than expected decrease was primarily due to steep drops in mining and utilities output, although manufacturing output also fell 0.3 percent.

A separate report from the University of Michigan showed an unexpected deterioration in consumer sentiment in the month of April.

The report said the preliminary reading on the consumer sentiment index for April came in at 89.7 compared to the final March reading of 91.0. The index has been expected to inch up to 92.0.

Traders largely shrugged off a report from the New York Fed showing a faster than expected expansion in regional manufacturing activity in April.

Treasuries also benefited from a notable decrease by the price of crude oil, with crude for May delivery tumbling $1.14 to $40.36 a barrel.

The continued decrease by the price of crude oil reflected trepidation ahead of this weekend's meeting of major oil producers in Doha.

The outcome of the meeting is likely to impact trading next week along with reports on housing starts, existing home sales, and homebuilder confidence.