Treasuries Regain Ground Following Recent Pullback

(RTTNews) - After moving sharply lower over the course of the two previous sessions, treasuries regained some ground during trading on Friday.

Bond prices drifted higher as the day progressed but pulled back off their best levels into the close. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.2 basis points to 2.151 percent.

With the modest drop on the day, the ten-year yield pulled back off the one-month closing high set in the previous session.

The rebound by treasuries came as traders went bargain hunting following the steep drop seen over the two previous sessions, which came in reaction to the Federal Reserve's monetary policy announcement.

The Fed left interest rates unchanged as was widely expected, but the central bank's accompanying statement left open the possibility of a rate hike in December.

Treasuries also benefited from the release of some disappointing U.S. economic data, including a report showing slightly smaller than expected upticks in personal income and spending.

The report said personal income inched up by 0.1 percent in September after climbing by an upwardly revised 0.4 percent in August. Economists had expected income to rise by 0.2 percent.

Personal spending also crept up by 0.1 percent in September after rising by an unrevised 0.4 percent in August. Spending had also been expected to climb by 0.2 percent.

A separate report from the University of Michigan showed that consumer sentiment improvement by less than previously estimated in October.

The University of Michigan said the consumer sentiment index for October was downwardly revised to 92.1 from 90.0, although it still came in above the final September reading of 87.2.

Meanwhile, MNI Indicators also released a report showing that Chicago-area business activity unexpectedly expanded in the month of October.

MNI Indicators said its Chicago Business Barometer jumped to 56.2 in October from 48.7 in September, with a reading above 50 indicating growth. The index has been expected to edge up to 49.2.

Economic data may continue to attract attention next week, with traders likely to keep a close eye on the monthly jobs report due out next Friday.

Ahead of the jobs report, trading could be impacted by reports on manufacturing activity, international trade, and labor productivity and costs.