Treasuries Regain Ground Following Two-Day Sell-Off

(RTTNews) - Treasuries moved back to the upside during trading on Friday, regaining ground following the sell-off seen over the two previous sessions.

Bond prices showed a notable advance in morning trading before giving back some ground in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell 4.6 basis points to 4.524 percent.

With the decrease on the day, the ten-year yield gave back ground after reaching its highest closing level in well over six months.

The rebound by treasuries came as traders reacted to the release of the Federal Reserve's preferred readings on consumer price inflation.

The Commerce Department said its personal consumption expenditures (PCE) price index inched up by 0.1 percent in November after rising by 0.2 percent in October. Economists had expected prices to increase by another 0.2 percent.

The annual rate of growth by the PCE price index accelerated to 2.4 percent in November from 2.3 percent in October, slightly slower than the 2.5 percent jump economists had expected.

Excluding food and energy prices, the core PCE price index also edged up by 0.1 percent in November after climbing by 0.3 percent in October. Economists had expected core prices to rise by 0.2 percent.

The annual rate of growth by the core PCE price index in November came in at 2.8 percent, unchanged from October, while economists had expected an acceleration to 2.9 percent.

The slower than expected annual rates of growth seemingly inspired traders to pick up bonds at reduced levels following the two-day sell-off.

Treasuries plunged over the two previous sessions after the Fed forecast fewer than previously estimated interest rate cuts next year amid lingering concerns about sticky inflation.

Chicago Fed President Austan Goolsbee told CNBC's Steve Liesman he's hopeful the data suggests "the couple of months of firming were more of a bump than a change in path."

Next week's trading activity is likely to be somewhat subdued due to the Christmas Day holiday on Wednesday, although reports on durable goods orders and new home sales may still attract some attention.