Treasuries Close Roughly Flat After Early Move To The Upside

Treasuries saw further upside in early trading on Friday but gave back ground over the course of the trading session.

Bond prices pulled back off their early highs and spent the rest of the day lingering near the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 4.258 percent.

Treasuries initially extended the rebound seen in the previous session, as traders continued to pick up bonds at relatively reduced levels.

Buying interest waned over the course of the session, as traders looked ahead to the release of some key economic data next week.

Next week will see the release of consumer and producer inflation data as well as reports on retail sales, industrial production and consumer sentiment.

The Labor Department’s report on consumer price inflation in the month of August is likely to be in the spotlight, as the data could have a significant impact on the outlook for interest rates.

“The August inflation report will tell a mixed story as surging energy prices weigh on headline inflation,” predicted Edward Moya, senior market analyst at OANDA. “Core readings however are expected to remain steady and that should support a September skip by the Fed.”

He added, “The risks for a November rate hike remain on the table and that will only happen if US growth exceptionalism remains in place.”

CME Group’s FedWatch Tool is currently indicating a 93.0 percent chance the Federal Reserve will leave interest rates later this month but a 43.4 percent chance of another rate hike in November.

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