Treasuries Give Back Ground Following Recent Strength

(RTTNews) - After recovering from an early pullback to end the previous session roughly flat, treasuries moved back to the downside during trading on Friday.

Bond prices regained some ground after an early slump but remained in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose 1.9 basis points to 4.017 percent.

The weakness among treasuries may have reflected profit taking following a recent upward trend, which saw the ten-year yield close below 4 percent for the first time since late October on Wednesday.

Treasuries have recently benefitted from renewed optimism about the outlook for interest rates following dovish comments from leading Federal Reserve officials.

Concerns the Fed may interest rates unchanged next month contributed to weakness among treasuries in late October and early November.

However, CME Group's FedWatch Tool is currently indicating an 86.9 percent chance the central bank will cut rates by another quarter point at its December meeting.

Trading activity remained somewhat subdued, however, as some traders likely remained away from their desks following the holiday.

A trading disruption at the Chicago Mercantile Exchange earlier in the day along with an early close on Wall Street may also have kept some traders on the sidelines along with a lack of major U.S. economic data.

Next week's trading may be impacted by reaction to the latest U.S. economic data, including reports on manufacturing and service sector activity and private sector employment.