Treasuries Move Back To The Upside Following Slew Of Data

After giving back some ground in the previous session, treasuries moved back to the upside during the trading day on Friday.

Bond prices pulled back off their early highs but remained in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3 basis points to 2.930 percent.

The rebound by treasuries came following the release of a slew of U.S. economic data, including a report from the Commerce Department showing retail sales jumped by more than expected in the month of June.

The Commerce Department said retail sales shot up by 1.0 percent in June after edging down by a revised 0.1 percent in May.

Economists had expected retail sales to increase by 0.8 percent compared to the 0.3 percent dip originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales still surged by 1.0 percent following a 0.6 percent increase in May. Ex-auto sales were expected to climb by 0.6 percent.

A separate report from the University of Michigan unexpectedly showed a modest improvement in U.S. consumer sentiment in the month of July.

The report showed the consumer sentiment index inched up to 51.1 in July from a record low 50.0 in June. The uptick surprised economists, who had expected the index to edge down to 49.9.

Inflation expectations also eased slightly, with one-year inflation expectations dipping to 5.2 percent in July from 5.3 in June and five-year inflation expectations slipping to 2.8 percent from 3.1 percent.

The Labor Department also released a report showing U.S. import prices crept up by much less than expected in the month of June, with a continued surge in prices for fuel imports partly offset by a decrease in prices for non-fuel imports.

Meanwhile, the Federal Reserve released a report showing an unexpected dip in U.S. industrial production in the month of June.

The Fed said industrial production slipped by 0.2 percent in June after revised data showed production was unchanged in May.

The modest decrease surprised economists, who had expected industrial production to inch up by 0.1 percent compared to the 0.2 percent uptick originally reported for the previous month.

Reports on housing starts and existing home sales may attract attention next week, as traders look ahead to the Federal Reserve’s monetary policy decision the following week.

Source: Read Full Article